# Bank of Mexico Sells $200 million to protect peso



## Meritorious-MasoMenos (Apr 17, 2014)

Excelsior front page story today: "El Banco de México accionó por primera vez ayer su nuevo mechanismo de subasta de dólares y colocó en el mercado la totalidad de 200 milliones de dólares ofrecidos, a un tipo de cambio ponderado de 14.7544 por billete estadunidense."

Strangely, I couldn't find it on the paper's website only a few hours later. It could matter, depending on how things go, that the Bank of Mexico had to use its new auction mechanism for first time, I assume to protect the peso. Article said the buying price for dollars rose to 15.05 pesos, but doesn't say since when.

Maybe no cause of concern but I've lived through two sharp devaluations that both began with oh-no-emergency selling of dollars by Bank of Mexico.

It seems to have fallen fairly quickly from 13 to 15 pesos. Of course, the paper assured us "That despite the volatility, experts forecast that in 2015 the dollar will return to values between 13.40 to 13.80 pesos."

All along Reforma yesterday, banks were buying cash dollars for 14.10 or 14.20 pesos per.

Was it on this site that folks said that you could get much better rate by using ATMs? I tried one on Reforma but got back just 13 pesos per dollar. Did I just hit a bad bank and I could expect to find most ATMs giving better rates than for cash?


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## Longford (May 25, 2012)

This was the subject of media reports a couple/several days ago. I read it in several places, including Mexican media articles. Here's a link to an Associated Press report from Tuesday:

Mexico Vows to Sell Dollars to Halt Peso's Slide - ABC News

Regarding best exchange rate: More often than not, I find that I get a better rate using an ATM, for the amounts of money I withdraw when visiting Mexico. Casas de Cambio often seem to offer a slightly higher exchange rate, but the difference is insignificant to me. If I were changing a very large amount of cash I would probably do it at the airport ... which has always been seen as THE place to go for the best rate for large sums.


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## Cristobal (Nov 25, 2014)

Meritorious-MasoMenos said:


> Excelsior front page story today: "El Banco de México accionó por primera vez ayer su nuevo mechanismo de subasta de dólares y colocó en el mercado la totalidad de 200 milliones de dólares ofrecidos, a un tipo de cambio ponderado de 14.7544 por billete estadunidense."
> 
> Strangely, I couldn't find it on the paper's website only a few hours later. It could matter, depending on how things go, that the Bank of Mexico had to use its new auction mechanism for first time, I assume to protect the peso. Article said the buying price for dollars rose to 15.05 pesos, but doesn't say since when.
> 
> ...


I don't know which devaluations you experienced but in 1982 and 1994, the problem was not having enough dollars in reserve. They could no longer afford to sell dollars at the rate of exchange at the time.


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## lhpdiver (Jul 30, 2014)

My timing is not very good. I purchased a chunk of pesos last week and netted 14.03. Personally I feel a little better knowing that I have enough pesos here in Mexico to live on and don't have to worry about potential constraints in the future. Besides - a one year cete returns 3.2% ! 

Last couple of weeks I've put my Mexican credit cards in the drawer and am using my US card.


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## Meritorious-MasoMenos (Apr 17, 2014)

Cristobal said:


> I don't know which devaluations you experienced but in 1982 and 1994, the problem was not having enough dollars in reserve. They could no longer afford to sell dollars at the rate of exchange at the time.


Uh, the reason they didn't have enough dollars in reserve is because they spent them all "protecting" the peso in the preceding months. The pressure became more and more intense, and was a tidal wave by the time the gov't threw in the towel and devalued. As I said, no worries now, but ...


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## Meritorious-MasoMenos (Apr 17, 2014)

Longford said:


> This was the subject of media reports a couple/several days ago. I read it in several places, including Mexican media articles. Here's a link to an Associated Press report from Tuesday:
> 
> Mexico Vows to Sell Dollars to Halt Peso's Slide - ABC News
> 
> Regarding best exchange rate: More often than not, I find that I get a better rate using an ATM, for the amounts of money I withdraw when visiting Mexico. Casas de Cambio often seem to offer a slightly higher exchange rate, but the difference is insignificant to me. If I were changing a very large amount of cash I would probably do it at the airport ... which has always been seen as THE place to go for the best rate for large sums.


Right, I had always found the airport casas de cambio very good, but not this time. Maybe I erred at stopping at first one, before clearing customs. I was late and in a hurry, but the ratones would only give about 11 per dollar, blithely assuring me it was the best rate in the city. I only changed enough to get into town.


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## Longford (May 25, 2012)

Meritorious-MasoMenos said:


> Right, I had always found the airport casas de cambio very good, but not this time. Maybe I erred at stopping at first one, before clearing customs. I was late and in a hurry, but the ratones would only give about 11 per dollar, blithely assuring me it was the best rate in the city. I only changed enough to get into town.


My reference to Casas de Cambio was meant to refer to "in the city" CdCs ... not the ones at the airport. The CdCs at the airport have long been known to offer just about the very best rate of exchange of any place in the country ... for very large conversions (not hundreds or US$1,000, as an example). At the airport in Mexico City I believe, and when I've checked, that I receive the highest rate of exchange at the _Cajero Automatico_. If I were still living in Mexico and exchanging US$ for MX$ on a consistent, year-round basis ... I'd probably be more concerned about the exchange rate. As a thrifty tourist these days, I really don't exchange/spend too much $$$ when traveling in Mexico to worry about making certain I get 50 pesos more on an exchange if I used one source or another.


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## Meritorious-MasoMenos (Apr 17, 2014)

Cristobal said:


> I don't know which devaluations you experienced but in 1982 and 1994, the problem was not having enough dollars in reserve. They could no longer afford to sell dollars at the rate of exchange at the time.


I've only been here for a few days, but another thing I've noticed that doesn't bode well for the peso is that prices are pretty high in dollar terms. That is exactly how Mexico was in 1981, one of the highest priced capitals in the world, because gov't was keeping peso artificially high. My company back then even had to give me a supplement on top of my salary to take care of that.

Taxis are the highest in my memory. The controlled airport taxi prices always averaged $15 to $22 for runs into town (I used to travel constantly and paid this dozens of times) but I paid $30. Regular taxis were also double. A ride from Monument to the Revolution to Condesa cost me $8, while I remember a usual price of $3-$4. Usual breakfasts at VIPS and Sanborns are close to $10 (double US price nearly everywhere, including NYC), getting a yogurt at a convenience store cost $2, single tacos at the dozens of pop-up stands are 10 pesos, nearly a buck, a cup of coffee at one of those mom and pop street places was 10 pesos regular, 15 pesos larger. These are prices paid by the lowest paid workers, and about three times, in dollar terms, what is usual. VIPS and Sanborns were both completely filled with Mexicans willing to pay, same as in 1981. A get-together with old Mexican pal at a great cantina was really pricey, but that could've been our "thirst."

Again, I just arrived and this all could be normal, but paying $1.50 for street coffee, poured out of a jug, seems sky-high.


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## Longford (May 25, 2012)

My last visit to the D.F. was in October, this year .... and I didn't notice any substantial increases at that time, as contrasted with visits earlier in the year. I typically visit the city 2/3 times yearly so increases may have taken places over time and I just didn't notice it. The exchange rate in October was about 13.5 to US$1. An MX$80 ride from the Revolution Monument to Condesa does strike me as being a bit on the high side, and maybe the driver tampered with the meter (which wouldn't be a surprise to me), or you were stuck in traffic for a very long time.  Maybe a sitio taxi, for which the charges are higher.


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## lhpdiver (Jul 30, 2014)

Meritorious-MasoMenos said:


> I've only been here for a few days, but another thing I've noticed that doesn't bode well for the peso is that prices are pretty high in dollar terms. That is exactly how Mexico was in 1981, one of the highest priced capitals in the world, because gov't was keeping peso artificially high. My company back then even had to give me a supplement on top of my salary to take care of that.
> 
> Taxis are the highest in my memory. The controlled airport taxi prices always averaged $15 to $22 for runs into town (I used to travel constantly and paid this dozens of times) but I paid $30. Regular taxis were also double. A ride from Monument to the Revolution to Condesa cost me $8, while I remember a usual price of $3-$4. Usual breakfasts at VIPS and Sanborns are close to $10 (double US price nearly everywhere, including NYC), getting a yogurt at a convenience store cost $2, single tacos at the dozens of pop-up stands are 10 pesos, nearly a buck, a cup of coffee at one of those mom and pop street places was 10 pesos regular, 15 pesos larger. These are prices paid by the lowest paid workers, and about three times, in dollar terms, what is usual. VIPS and Sanborns were both completely filled with Mexicans willing to pay, same as in 1981. A get-together with old Mexican pal at a great cantina was really pricey, but that could've been our "thirst."
> 
> Again, I just arrived and this all could be normal, but paying $1.50 for street coffee, poured out of a jug, seems sky-high.


You are quoting Mexico City prices. Here in the City of Eternal Spring things are a little different. We live outside town, up in the hills coming down from Mexico City. We pay 10 pesos for a decent sized fresh orange juice on the street. The last Starbucks I had was 34 pesos - but the parking was 8 pesos ! We like the convenience of Costco/Mega but we pay half locally for fruits/vegetables. A taxi from our home to the city center (20-30 minutes depending) is about 70 pesos. Our favorite breakfast place - 205 pesos before tip - huevos rancheros, tocino, hugo verde, cafe - for the 2 of us. A large company I once worked for (maybe 20 years ago) had a whole catalog of price adjustments for travel/living expenses based on location. Looking back it is funny how we all knew how much we were allowed to spend (each) for a business lunch, we would count the number of people at the table - then order accordingly to max it out.


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## Meritorious-MasoMenos (Apr 17, 2014)

lhpdiver said:


> You are quoting Mexico City prices. Here in the City of Eternal Spring things are a little different. We live outside town, up in the hills coming down from Mexico City. We pay 10 pesos for a decent sized fresh orange juice on the street. The last Starbucks I had was 34 pesos - but the parking was 8 pesos ! We like the convenience of Costco/Mega but we pay half locally for fruits/vegetables. A taxi from our home to the city center (20-30 minutes depending) is about 70 pesos. Our favorite breakfast place - 205 pesos before tip - huevos rancheros, tocino, hugo verde, cafe - for the 2 of us. A large company I once worked for (maybe 20 years ago) had a whole catalog of price adjustments for travel/living expenses based on location. Looking back it is funny how we all knew how much we were allowed to spend (each) for a business lunch, we would count the number of people at the table - then order accordingly to max it out.


Well, maybe Mexico City has taken its rightful place as a leading world capital, then, and the prices are fair. I was just struck by the buying price for dollars falling to 15 pesos, and then seeing all the relatively high prices. 

RE Longford's "An MX$80 ride from the Revolution Monument to Condesa does strike me as being a bit on the high side, and maybe the driver tampered with the meter (which wouldn't be a surprise to me), or you were stuck in traffic for a very long time. Maybe a sitio taxi, for which the charges are higher."

Was a street cab, not sitio. Traffic wasn't bad, but a tampered meter is always a possibility. As I said, these are only initial impressions. I hope the future is a strong and stable Mexico, even if that includes high DF prices.


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## Isla Verde (Oct 19, 2011)

lhpdiver said:


> You are quoting Mexico City prices. Here in the City of Eternal Spring things are a little different. We live outside town, up in the hills coming down from Mexico City. We pay 10 pesos for a decent sized fresh orange juice on the street. The last Starbucks I had was 34 pesos - but the parking was 8 pesos ! We like the convenience of Costco/Mega but we pay half locally for fruits/vegetables. A taxi from our home to the city center (20-30 minutes depending) is about 70 pesos. Our favorite breakfast place - 205 pesos before tip - huevos rancheros, tocino, hugo verde, cafe - for the 2 of us....


I do live in Mexico City a few blocks in back of the US Embassy. In my neighborhood, I can also get a large glass of freshly-squeezed OJ for 10 pesos. I rarely go to Starbuck's but get much better coffee at places near me where a medium cappuccino comes to around 28 pesos. My favorite breakfast place charges 70 or 80 pesos for a full breakfast, and there are places that charge a bit less. Prices have been going up the last few years for most things, but I still have a good life here with an income from two modest pensions, something that would not be true if I were still living in the States.


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## TundraGreen (Jul 15, 2010)

I started tracking the value of the peso regularly a few months ago. Lately, it has been going down at a steady rate. I heard that the Euro is also weak against the dollar, so I just assumed that the changing value of the peso was a reflection of strengthening of the dollar rather than of weakening of the peso. Maybe there is more to the story.

Recent peso prices:
2014-09-04	13.1294
2014-09-05	13.0806
2014-09-06	13.0355
2014-09-07	13.0355
2014-09-08	13.0772
2014-09-09	13.2329
2014-09-10	13.2346
2014-09-11	13.2167
2014-09-12	13.26
2014-09-13	13.2535
2014-09-14	13.2535
2014-09-15	13.2016
2014-09-16	13.1287
2014-09-22	13.2539
2014-09-23	13.2995
2014-09-26	13.3728
2014-10-03	13.3986
2014-10-15	13.565
2014-10-17	13.5205
2014-10-18	13.5205
2014-10-20	13.5358
2014-10-21	13.4855
2014-10-22	13.5331
2014-10-23	13.5301
2014-10-24	13.5559
2014-10-25	13.5585
2014-10-26	13.5415
2014-10-27	13.5597
2014-10-28	13.4962
2014-10-29	13.4256
2014-10-30	13.4266
2014-10-31	13.488
2014-11-01	13.4775
2014-11-02	13.432
2014-11-03	13.5535
2014-11-04	13.6384
2014-11-05	13.5501
2014-11-06	13.5864
2014-11-07	13.5725
2014-11-08	13.5355
2014-11-09	13.5253
2014-11-10	13.5345
2014-11-12	13.5825
2014-11-13	13.6278
2014-11-14	13.5542
2014-11-19	13.565
2014-11-21	13.6557
2014-11-22	13.6185
2014-11-24	13.6164
2014-11-25	13.6468
2014-11-26	13.7195
2014-11-27	13.7585
2014-12-02	14.0089
2014-12-01	13.9392
2014-12-03	14.0935
2014-12-04	14.1201
2014-12-05	14.186
2014-12-06	14.3578
2014-12-07	14.3578
2014-12-08	14.3385
2014-12-09	14.3837
2014-12-10	14.4032
2014-12-11	14.5769
2014-12-12	14.7876
2014-12-12	14.7563


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## lhpdiver (Jul 30, 2014)

Meritorious-MasoMenos said:


> Well, maybe Mexico City has taken its rightful place as a leading world capital, then, and the prices are fair. I was just struck by the buying price for dollars falling to 15 pesos, and then seeing all the relatively high prices.
> 
> RE Longford's "An MX$80 ride from the Revolution Monument to Condesa does strike me as being a bit on the high side, and maybe the driver tampered with the meter (which wouldn't be a surprise to me), or you were stuck in traffic for a very long time. Maybe a sitio taxi, for which the charges are higher."
> 
> Was a street cab, not sitio. Traffic wasn't bad, but a tampered meter is always a possibility. As I said, these are only initial impressions. I hope the future is a strong and stable Mexico, even if that includes high DF prices.


Perhaps it is because my wife's Spanish is so incredible  or we are just unusual - but - in Mexico - we have never paid a metered rate for a taxi. We flag a taxi - stick our head in the window, say where we want to go and ask how much. That is true in and out of Mexico City. Our best deal - 200 pesos from Polanco to Taxquena (?) - the guy was 'retired' and just driving his taxi to meet people.


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## Longford (May 25, 2012)

lhpdiver said:


> Perhaps it is because my wife's Spanish is so incredible  or we are just unusual - but - in Mexico - we have never paid a metered rate for a taxi. We flag a taxi - stick our head in the window, say where we want to go and ask how much. That is true in and out of Mexico City. Our best deal


I'll suggest that you're unusual. My experience and observation has been that it's the rare day in Mexico City that a driver will charge an "off meter" price which is less than he know the meter to be anyway. People may just think they're getting a deal, if they don't already know what the fare should be if the meter was used. As for "200 pesos from Polanco to Taxquena", that's probably a good/normal fare ... when the meter is used. Not all taxi's in Mexico utilize a meter. In Acapulco, each ride is negotiated .. and it's the rare day someone who's obviously a foreigner will pay lthe same than a local (Mexican). A higher price is what I find/see typical.


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## Cristobal (Nov 25, 2014)

Meritorious-MasoMenos said:


> Uh, the reason they didn't have enough dollars in reserve is because they spent them all "protecting" the peso in the preceding months. The pressure became more and more intense, and was a tidal wave by the time the gov't threw in the towel and devalued. As I said, no worries now, but ...


Sorry but you are incorrect. By selling dollars at a very low rate to the general public and also to pay off public and private debt over the course of several years (not months) they had depleted the reserves. Oil prices had dropped and manufactured goods for export were not competitive because of the exchange rate prior to the 1982 devaluation so there were not enough dollars entering the treasury. Inflation was much higher here than in the US. They no longer had dollars to service the foreign debt obligations and were forced to devalue. If they had begun to sell dollars (which they didn't have to begin with and the very worst thing they could have done with a completely controlled rate) it would have triggered speculation and caused an incredible run on the dollar, thus worsening the problem. They devalued to protect whatever amount they still held in reserve. People were snapping up dollars at around 25 pesos to 1usd and depositing them in foreign accounts and even dollar accounts in Mexican banks. Taking shopping trips to the US, spending fistfulls of dollars with _fayuqueros_ on smuggled in consumer goods. Sending the kids off on European vacations. Mexicans were taking full advantage of the vastly overvalued peso. It finally came down to protecting foreign reserves, not the other way around.

In 1994 Zedillo's mere mention of a devaluation hastened along the crisis. Same story, too many pesos chasing too few dollars.


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## chicois8 (Aug 8, 2009)

Just used my CITI card at a Banamex ATM and the rate turned out to be 14.79, fee free......


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## lhpdiver (Jul 30, 2014)

Longford said:


> I'll suggest that you're unusual. My experience and observation has been that it's the rare day in Mexico City that a driver will charge an "off meter" price which is less than he know the meter to be anyway. People may just think they're getting a deal, if they don't already know what the fare should be if the meter was used. As for "200 pesos from Polanco to Taxquena", that's probably a good/normal fare ... when the meter is used. Not all taxi's in Mexico utilize a meter. In Acapulco, each ride is negotiated .. and it's the rare day someone who's obviously a foreigner will pay lthe same than a local (Mexican). A higher price is what I find/see typical.


fwiw - we always stay at the same place in Mexico City - where they treat my wife like a queen because of her many visits over her business life. When they call her/us a taxi - the fare is negotiated up front. Just an example.


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## lhpdiver (Jul 30, 2014)

TundraGreen said:


> I started tracking the value of the peso regularly a few months ago. Lately, it has been going down at a steady rate. I heard that the Euro is also weak against the dollar, so I just assumed that the changing value of the peso was a reflection of strengthening of the dollar rather than of weakening of the peso. Maybe there is more to the story.


Yahoo finance tracks USD/MXN - they no longer provide historical prices but they do provide charting. The 5 year chart kind of shows how life ebbs and flows. 

I'm sure there is a lot more to the story. Where would the oil be if the Saudis cut production ? How much of this is just an alpha-male thing between Obama and Putin ? How does the US dig it's way out from 18 trillion in debt ?


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## Isla Verde (Oct 19, 2011)

I rarely take taxis any more, but when I do, I hail one from the street and pay the metered fare. If the taximeter isn't working or the taxi doesn't have one (which rarely happens), then I take another cab.


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## Longford (May 25, 2012)

lhpdiver said:


> Yahoo finance tracks USD/MXN - they no longer provide historical prices but they do provide charting. The 5 year chart kind of shows how life ebbs and flows.
> 
> I'm sure there is a lot more to the story. Where would the oil be if the Saudis cut production ? How much of this is just an alpha-male thing between Obama and Putin ? How does the US dig it's way out from 18 trillion in debt ?


I'm not certain what Obama and Putin have to do with Mexico's financial woes ... sliding value of currency, loss of oil revenues it needs to pay for government programs, etc. If I were living in Mexico at the moment and heavily dependent upon Pesos, I'd be a bit more worried about Mexico and it's affairs than the rest of the world (though I realize there are influences). Now, for many expats in Mexico ... particularly those living marginally and having income from the USA (such as Social Security retirement or disability), they're probably smiling a bit.


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## lhpdiver (Jul 30, 2014)

Isla Verde said:


> I rarely take taxis any more, but when I do, I hail one from the street and pay the metered fare. If the taximeter isn't working or the taxi doesn't have one (which rarely happens), then I take another cab.


I guess - different strokes for different folks - in Mexico in particular - we have often been disappointed when things aren't very clearly laid out initially. We can be very generous - but we don't like surprises - taxi drivers / repairmen etc. How much / please give us an estimate ...


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## lhpdiver (Jul 30, 2014)

Longford said:


> I'm not certain what Obama and Putin have to do with Mexico's financial woes ... sliding value of currency, loss of oil revenues it needs to pay for government programs, etc. If I were living in Mexico at the moment and heavily dependent upon Pesos, I'd be a bit more worried about Mexico and it's affairs than the rest of the world (though I realize there are influences). Now, for many expats in Mexico ... particularly those living marginally and having income from the USA (such as Social Security retirement or disability), they're probably smiling a bit.


Mexico's financial woes ? Where was the dollar/peso before the Saudis said they would not cut production ? I believe Mexico has nothing but the brightest of futures. If I were an expat living 'marginally' I would be 'making hay' because things always go up and down. Happy Holidays !


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## lhpdiver (Jul 30, 2014)

Isla Verde said:


> I do live in Mexico City a few blocks in back of the US Embassy. In my neighborhood, I can also get a large glass of freshly-squeezed OJ for 10 pesos. I rarely go to Starbuck's but get much better coffee at places near me where a medium cappuccino comes to around 28 pesos. My favorite breakfast place charges 70 or 80 pesos for a full breakfast, and there are places that charge a bit less. Prices have been going up the last few years for most things, but I still have a good life here with an income from two modest pensions, something that would not be true if I were still living in the States.


Our favorite hotel is in zona rosa...

I should save this response off so I could easily cut and paste it - since I use it so often it seems.

We LOVE Mexico. We had a pretty good life in the US. We have no family. No kids. A handful of carefully chosen friends. Been married 30 years. Both worked - and saved. No pensions etc - just savings. Never really had a mortgage. Never paid a penny in credit card interest. No debt.

Since moving to Mexico :
- our property taxes have gone from $10K + to about $1600 USD.
- our water bill has gone from something like $200 + USD/month to like $600/year (community well).
- Our medical insurance has gone from $904 USD/month (with COBRA) to something like $600 USD/year with IMSS.
- Our monthly electric bill has gone from maybe $300 USD/month to --- 26 pesos (PV panels).
- We have a 'wealth' of Mexican friends here. 

We have a GREAT life here.


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## TundraGreen (Jul 15, 2010)

Longford said:


> I'll suggest that you're unusual. My experience and observation has been that it's the rare day in Mexico City that a driver will charge an "off meter" price which is less than he know the meter to be anyway. People may just think they're getting a deal, if they don't already know what the fare should be if the meter was used. As for "200 pesos from Polanco to Taxquena", that's probably a good/normal fare ... when the meter is used. Not all taxi's in Mexico utilize a meter. In Acapulco, each ride is negotiated .. and it's the rare day someone who's obviously a foreigner will pay lthe same than a local (Mexican). A higher price is what I find/see typical.


I don't know how unusual that experience is. I don't use taxis often but when I do, I always negotiate a price before getting in. Often the meter is also running and I can compare the cost. In every case where the meter is running, the price we agreed upon was less. I have given drivers a tip when they difference has cost them too much. I will split the difference between what they would have received with the meter and what they agreed to with me. 

I never pick up cabs in the sitios. Maybe because they feel they have a captive audience, you have to take the cab at the head of the line, they are rarely willing to negotiate. Flagging down a cab on the street, they almost always are flexible on the price. It helps, of course, to know something about what the going rate for the ride will be.

My experience is in Guadalajara, not Mexico City.


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## Meritorious-MasoMenos (Apr 17, 2014)

chicois8 said:


> Just used my CITI card at a Banamex ATM and the rate turned out to be 14.79, fee free......


I think I want to kiss you, Chicois. That's about 1.72 pesos more than I got from a bank that was definitely not Banamex along Reforma yesterday. I'm trying Banamex next with my US ATM. Banamex is sure popular with Mexicans. I believe today Friday was payday, but for whatever, Mexicans were lining up in droves outside banks in the afternoon, with Banamex having lines five times as long as any other bank.


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## Meritorious-MasoMenos (Apr 17, 2014)

Cristobal said:


> Sorry but you are incorrect. By selling dollars at a very low rate to the general public and also to pay off public and private debt over the course of several years (not months) they had depleted the reserves. Oil prices had dropped and manufactured goods for export were not competitive because of the exchange rate prior to the 1982 devaluation so there were not enough dollars entering the treasury. Inflation was much higher here than in the US. They no longer had dollars to service the foreign debt obligations and were forced to devalue. If they had begun to sell dollars (which they didn't have to begin with and the very worst thing they could have done with a completely controlled rate) it would have triggered speculation and caused an incredible run on the dollar, thus worsening the problem. They devalued to protect whatever amount they still held in reserve. People were snapping up dollars at around 25 pesos to 1usd and depositing them in foreign accounts and even dollar accounts in Mexican banks. Taking shopping trips to the US, spending fistfulls of dollars with _fayuqueros_ on smuggled in consumer goods. Sending the kids off on European vacations. Mexicans were taking full advantage of the vastly overvalued peso. It finally came down to protecting foreign reserves, not the other way around
> 
> In 1994 Zedillo's mere mention of a devaluation hastened along the crisis. Same story, too many pesos chasing too few dollars.


You're 100% correct about 1982 devaluation, but I didn't write that the govt was funneling dollars to buy pesos as today back then, but as I wrote: "they spent them all "protecting" the peso in the preceding months," but yes, as you said, that was by trying to keep pace with demand for dollars. But they were protecting the peso just the same, as in Lopez Portillo's famous vow, which I've posted before, that he would protect the peso "like a dog." Yes, of course, you're right that the pressure had been building for several years, but again, Mexico was getting whipsawed in a burgeoning crisis by falling oil prices, falling exports, more and more dollar buying by savvy Mexicans, in the last 6-7 months before the abrupt devaluation, the first one in Sept. 82.


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## Cristobal (Nov 25, 2014)

Meritorious-MasoMenos said:


> You're 100% correct about 1982 devaluation, but I didn't write that the govt was funneling dollars to buy pesos as today back then, but as I wrote: "they spent them all "protecting" the peso in the preceding months," but yes, as you said, that was by trying to keep pace with demand for dollars. But they were protecting the peso just the same, as in Lopez Portillo's famous vow, which I've posted before, that he would protect the peso "like a dog." Yes, of course, you're right that the pressure had been building for several years, but again, Mexico was getting whipsawed in a burgeoning crisis by falling oil prices, falling exports, more and more dollar buying by savvy Mexicans, in the last 6-7 months before the abrupt devaluation, the first one in Sept. 82.


The abrupt devaluation was in Febuary, 1982. JLP grabbed the dollar accounts held in Mexican banks in August, exchanging them for pesos at a rate far below street value. In his annual _Informe_ on September 1st he nationalized the banks. For a time they tried to limit the amount of dollars being out of the country to a very small amount, $250usd IIRC but that decree was shot down by the Supreme Court.


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## Meritorious-MasoMenos (Apr 17, 2014)

Cristobal said:


> The abrupt devaluation was in Febuary, 1982. JLP grabbed the dollar accounts held in Mexican banks in August, exchanging them for pesos at a rate far below street value. In his annual _Informe_ on September 1st he nationalized the banks. For a time they tried to limit the amount of dollars being out of the country to a very small amount, $250usd IIRC but that decree was shot down by the Supreme Court.


Right, right. I remember now. I signed a contract to buy a new VW about one week before that August devaluation, and by the time I had to pay it, it was half price, once I changed dollars. And that Sept. nationalization, I attended the speech, as a reporter. They locked us in! Once Lopez Portillo started to speak, they wouldn't let any reporter out until he finished. They didn't want news to get out until they were ready. No cell phones in those far off days, and no one had a satellite phone, among we poor scribes. We were all snarling and yelling at each other, but nothing we could do.


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## Cristobal (Nov 25, 2014)

Meritorious-MasoMenos said:


> Right, right. I remember now. I signed a contract to buy a new VW about one week before that August devaluation, and by the time I had to pay it, it was half price, once I changed dollars. And that Sept. nationalization, I attended the speech, as a reporter. They locked us in! Once Lopez Portillo started to speak, they wouldn't let any reporter out until he finished. They didn't want news to get out until they were ready. No cell phones in those far off days, and no one had a satellite phone, among we poor scribes. We were all snarling and yelling at each other, but nothing we could do.


Really? I don't know why that would be. The _Informe_ has been broadcast live throughout the nation as far back as I can remember. Lopez Portillo cried live on national TV. What news agency did you say you were accredited with?

A quote from his _Informe_:



> Quiero aprovechar esta ocasión en que me está oyendo el pueblo de México para insistir: sus depósitos, sus derechos en los bancos de ninguna manera serán alterados.


Translated: I would like to take advantage of this occasion while the people of Mexico are listening to insist, your deposits and all rights in your banks will in no way be altered.


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## Meritorious-MasoMenos (Apr 17, 2014)

Cristobal said:


> Really? I don't know why that would be. The _Informe_ has been broadcast live throughout the nation as far back as I can remember. Lopez Portillo cried live on national TV. What news agency did you say you were accredited with?
> 
> A quote from his _Informe_:
> 
> Translated: I would like to take advantage of this occasion while the people of Mexico are listening to insist, your deposits and all rights in your banks will in no way be altered.


Yes, it was broadcast live, but no one had advanced copies of the speech except the reporters who attended the speech live. They handed them out that way every year before the speech's broadcast, but that year, the doors were blocked first. Yes, our reporters at the office were working frantically from the TV broadcast, but of course, not very fast. They were not prepared for a major story, and expected to wait to file until we returned with the prepared text. Suddenly, they had to scramble, but carefully. How would you like to put out a story that an important country just nationalized its banks by surprise, and be wrong about it, faulty hearing or something! It was chaos that day.


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## Cristobal (Nov 25, 2014)

Maybe you missed the question. Who were you accredited with at the time?


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## Meritorious-MasoMenos (Apr 17, 2014)

Cristobal said:


> Maybe you missed the question. Who were you accredited with at the time?


Claro que no. That's for a PM or email or foner.


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## Cristobal (Nov 25, 2014)

Meritorious-MasoMenos said:


> Claro que no. That's for a PM or email or foner.


 If you attended the speech as you claim then why would you be hesitant to reveal your employer? I'm sorry but your story seems quite far fetched.


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## TundraGreen (Jul 15, 2010)

Cristobal said:


> If you attended the speech as you claim then why would you be hesitant to reveal your employer? I'm sorry but your story seems quite far fetched.


Revealing personal information on public websites like this is generally a bad idea. It may seem harmless, but one of the ways that hackers get into people's accounts is by accumulating enough information about the target to be able to successfully convince someone that they are that person.

People should be very careful about how much information they share on line.


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## Meritorious-MasoMenos (Apr 17, 2014)

Cristobal said:


> If you attended the speech as you claim then why would you be hesitant to reveal your employer? I'm sorry but your story seems quite far fetched.


TundraGreen hit it. Let's start with you telling us who you are, how about?


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## Cristobal (Nov 25, 2014)

TundraGreen said:


> Revealing personal information on public websites like this is generally a bad idea. It may seem harmless, but one of the ways that hackers get into people's accounts is by accumulating enough information about the target to be able to successfully convince someone that they are that person.
> 
> People should be very careful about how much information they share on line.


OK sorry, my mistake. But you have to admit with a forum named *Introduction to the forum - Tell us about yourself* and reading the responses there, you wouldn't think asking about an event that happened over 30 years ago would be out of line.


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## TundraGreen (Jul 15, 2010)

Cristobal said:


> OK sorry, my mistake. But you have to admit with a forum named *Introduction to the forum - Tell us about yourself* and reading the responses there, you wouldn't think asking about an event that happened over 30 years ago would be out of line.


Asking was not out of line. But it is not surprising if they choose not to respond.


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## Cristobal (Nov 25, 2014)

TundraGreen said:


> Asking was not out of line. But it is not surprising if they choose not to respond.


And not only for reasons of privacy!


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## TundraGreen (Jul 15, 2010)

Cristobal said:


> And not only for reasons of privacy!


:deadhorse:


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