The Mexican Peso Experienced a Notable Setback in Recent Weeks

In recent weeks, the Mexican peso has experienced a notable depreciation against the U.S. dollar, influenced by various economic and political factors.

As of February 24, 2025, the exchange rate stands at 20.44 pesos per dollar, reflecting a loss of 1.95 cents compared to the previous day.

U.S. Tariff Threats

One of the main factors that has caused uncertainty in the markets is the threat from U.S. President Donald Trump to impose tariffs of 25% on all Mexican imports starting in March.

This measure seeks to obtain political concessions on issues such as immigration and drug trafficking, in addition to strengthening domestic production in key sectors like automotive and aerospace.

Since more than 80% of Mexican exports are destined for the United States, this situation puts over 500 billion dollars in trade at risk.

Adjustments in Economic Projections

In this scenario, the Bank of Mexico has revised its economic growth forecast for 2025 downward, reducing it from 1.2% to 0.6%.

This decision is attributed to the possible implementation of tariffs by the United States, which could negatively affect consumption and private investment in Mexico during the first half of the year.

Additionally, possible volatility in financial markets and a cooling of the U.S. economy are anticipated, factors that could influence the Mexican economy.

Image suggestion: Graph showing the peso-dollar exchange rate trend in recent weeks.

Additional Factors Affecting the Exchange Rate

In addition to trade tensions, other elements influence the depreciation of the Mexican peso:

• Inflation and Interest Rates: Differentials in inflation and interest rates between Mexico and the United States can affect the demand for both currencies, impacting the exchange rate.
• Trade Balance: A trade balance deficit, where imports exceed exports, can generate a higher demand for foreign currencies, weakening the local currency.
• Public Debt: High levels of public debt can discourage foreign investment, as investors perceive a higher risk, which can lead to a depreciation of the currency.

Future Outlook

It is crucial for Mexico to diversify its export markets and strengthen its internal economy to reduce dependence on the U.S. market.

Additionally, maintaining prudent fiscal and monetary policies will be essential to stabilize the exchange rate and foster a favorable economic environment.