# The Peso



## ZaPatton (Aug 17, 2015)

Has hit a all time low vs the USD at 17 pesos to 1 USD has this helped in a any major way to the way you live?? Last time I was in Mexico it was onle 12-13 pesos to the usd.


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## WintheWin (Jul 15, 2015)

I can tell you my liver's not happy.

But generally, yes, it's great. Doing some home renovations. Perfect time.


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## ZaPatton (Aug 17, 2015)

WintheWin said:


> I can tell you my liver's not happy.
> 
> But generally, yes, it's great. Doing some home renovations. Perfect time.


What are you actually converting at?


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## Cristobal (Nov 25, 2014)

May be great for those with incomes in USD but not for those of us (like 110,000,000 of us) who earn our living in pesos. With every large devaluation comes the corresponding inflation. And that should be kicking in soon.


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## ZaPatton (Aug 17, 2015)

Cristobal said:


> May be great for those with incomes in USD but not for those of us (like 110,000,000 of us) who earn our living in pesos. With every large devaluation comes the corresponding inflation. And that should be kicking in soon.


Sorry for the ramifications on my people.


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## ojosazules11 (Nov 3, 2013)

Cristobal said:


> May be great for those with incomes in USD but not for those of us (like 110,000,000 of us) who earn our living in pesos. With every large devaluation comes the corresponding inflation. And that should be kicking in soon.


Those of us in Canada share this reality... And the price of oil fell again this past week... along with the Toronto stock market. Good thing I'm not yet ready for retirement or I'd be taking a hit on my RRSPs.


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## coondawg (May 1, 2014)

We are also having work done on our house. We pay by the hour, and pay 80 pesos/hr. That is a lot more than the people who work by the week get around here. But, we expect good and timely work, or we find someone else. Not much problem with that, as many get 30-40 pesos/hr.


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## AlanMexicali (Jun 1, 2011)

Cristobal said:


> May be great for those with incomes in USD but not for those of us (like 110,000,000 of us) who earn our living in pesos. With every large devaluation comes the corresponding inflation. And that should be kicking in soon.


A Mexican news article stated the federal government expects the inflation rate predicted this year to be lower than expected due to financial considerations. In 2014 it was at 4.24%. It was expected to be close to last year´s rate.


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## Cristobal (Nov 25, 2014)

AlanMexicali said:


> A Mexican news article stated the federal government expects the inflation rate predicted this year to be lower than expected due to financial considerations. In 2014 it was at 4.24%. It was expected to be close to last year´s rate.


The Mexican government, when estimating their budget expenses, also pegged the price of oil at a much higher price. They fell far short. How will they make up the budget deficit caused by lack of oil revenues? If they don't cut spending then they will have to borrow. That usually means printing more money and that causes inflation.


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## AlanMexicali (Jun 1, 2011)

Cristobal said:


> The Mexican government, when estimating their budget expenses, also pegged the price of oil at a much higher price. They fell far short. How will they make up the budget deficit caused by lack of oil revenues? If they don't cut spending then they will have to borrow. That usually means printing more money and that causes inflation.


Pemex oil/gas revenues went from 54% down to 35% and SAT and IVA tax collection is up since the new tax laws. I think the situation has changed somewhat from previous decades. Also some government projects are on hold. Manufactured goods exports are up and foreign investment is up.


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## Cristobal (Nov 25, 2014)

AlanMexicali said:


> Pemex oil/gas revenues went from 54% down to 35% and SAT and IVA tax collection is up since the new tax laws. I think the situation has changed somewhat from previous decades. Also some government projects are on hold. Manufactured goods exports are up and foreign investment is up.


I am not talking about past decades.

México con el déficit más alto desde 2009 | El Economista


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## AlanMexicali (Jun 1, 2011)

Cristobal said:


> The Mexican government, when estimating their budget expenses, also pegged the price of oil at a much higher price. They fell far short. How will they make up the budget deficit caused by lack of oil revenues? If they don't cut spending then they will have to borrow. That usually means printing more money and that causes inflation.






AlanMexicali said:


> Pemex oil/gas revenues went from 54% down to 35% and SAT and IVA tax collection is up since the new tax laws. I think the situation has changed somewhat from previous decades. Also some government projects are on hold. Manufactured goods exports are up and foreign investment is up.








Cristobal said:


> I am not talking about past decades.
> 
> México con el déficit más alto desde 2009 | El Economista


I reread my above post and didn´t make it clear that Pemex revenue taken and put in the federal treasury is down from 54% to 35%.

I think revenue gathering is up in Mexico since 2009 quite a bit especially in the last 18 months and will continue and over time will make past budget comparisons obsolete. No use in comparing it at this point in time. IMO


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## michmex (Jul 15, 2012)

Cristobal said:


> The Mexican government, when estimating their budget expenses, also pegged the price of oil at a much higher price. They fell far short. How will they make up the budget deficit caused by lack of oil revenues? If they don't cut spending then they will have to borrow. That usually means printing more money and that causes inflation.


Mexico hedged the oil prices for 2015 by purchasing put options for 2015. From Reuters November 13,2014.

"Finance Minister Luis Videgaray told reporters that Mexico purchased put options between September and November to guarantee an average oil price of $76.40 per barrel for next year's exports, below the forecast price in the country's 2015 budget."

The article also states that Mexico budgeted price for oil was $79 USD per barrel and that the shortfall any additional will be made up by drawing on its "rainy day fund".

UPDATE 2-Mexico hedges 2015 oil exports, paying 40 pct than a year ago | Reuters

Mexico has also cut some spending by delaying (maybe forever) some very expensive infrastructure projects such as high speed rail.

For info on this years hedging program for 2016 at very pessimistic price of $49 per barrel here is a link to another Reuters article.

Mexico wraps $1.1 billion oil options hedge to lock in $49 floor | Reuters


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## ZaPatton (Aug 17, 2015)

michmex said:


> Mexico hedged the oil prices for 2015 by purchasing put options for 2015. From Reuters November 13,2014.
> 
> "Finance Minister Luis Videgaray told reporters that Mexico purchased put options between September and November to guarantee an average oil price of $76.40 per barrel for next year's exports, below the forecast price in the country's 2015 budget."
> 
> ...


Mexicos Inflation doesnt look to bad compared to previous years!

Mexico Inflation Rate | 1974-2015 | Data | Chart | Calendar | Forecast


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## WintheWin (Jul 15, 2015)

Here in Baja, the biggest issue has been raising of taxes, made all the goods go up considerably. No more 40 peso tarros.


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## Meritorious-MasoMenos (Apr 17, 2014)

I did see my first long line in a peso exchange house today on Insurgentes Centro. There were about 20 people lined up, all Mexicans probably. I was going to wander down Reforma where there are many more exchange houses but didn't make it.
Long lines at exchange houses were another sign of peso instability and coming devaluations in my experiences in the 80s and 90s as Mexicans did everything they could to get dollars. When I returned to Mexico in December, I grumped on this board at what I thought were very high prices on everyday goods and services, another ill sign for a country's currency such as Mexico. Much as I love the country, this ain't Europe, yet.
Of course, that exchange house could've been just an anomaly, but again, I often glance at these businesses ambling in D.F., and they've usually been empty, or at most two people in line.
Mexican newspapers last week published a few articles on how the country's dollar reserves fell to their lowest levels since the 2009 global panic. Falling reserves are another sign that would worry people, though Mexico's levels still seem pretty good compared to previous peso collapses.
Of course, just the steady, daily decline must upset people who travel to the U.S. often.
Dollar is not the only rising currency. Milenio TV said the peso fell about 12 centavos against the dollar in opening quotes today but about 24 against the euro.
Overall, Mexico still appears so much more stable financially than at the end of the 20th, thank goodness.


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