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Currencies |
| MEXICAN PESO |
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| Introduction
| Overview | Structure
| History | Factors
affecting change in exchange rates | Daily
trend of Mexican peso | Weekly
trend of Mexican peso |
| Introduction |
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Peso is a term referred to the currency unit of countries
including Argentina, Mexico, Chile, Colombia, Uruguay, Dominican
Republic, Cuba and Philippines. The term "peso" firstly
originated in Spain that meant, "weight" and later on
Spain introduced a currency named peso and it was based directly
to the weight of silver. One of the currencies that are counted
important among the other peso currencies of the world is the
Mexican peso.
Mexican peso is the national currency of
Mexico and is denoted with a "$" sign officially. To
differentiate with US dollar, the Mexican peso is also depicted as
"Mex$". "Centavo", denoted as "¢",
serves as the subunit of the currency and is equal to 1/100th of
one unit of peso. The ISO 4217 regulation suggests MXN as the
currency code and 484 as the numeric code of Mexican peso. Mexico
had been using the currency since it got independent in 1821.
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Overview
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Mexican peso had been a very popular currency in the past. There
was a time when the currency was used as a trade coin not only in
Mexico but also across its borders in whole of North America,
China and as far as South East Asia and Pacific islands. It has
got some milestones attached to its name like it used the coins
with distinct borders and also as a security measure, minted all
the currency coins of exact weight for the first time in the
history. But in the recent times, the currency’s popularity and
strength has not been like it was in the previous times. Mexican
peso had some hiccups in 1994 when it encountered a major crisis,
popularly known Mexican peso crisis. During this time, the
crawling peg that the currency had been using was removed and the
currency was floated leading to a sudden devaluation in the value.
Mexican peso recovered from the crisis in 1995 and it has been
going good since then.
Mexico tops among the Latin American
countries in context of the per capita income. The economy is
based on a high private sector ownership and has a sound export
sector that helped the country come out of its peculiar situation
in 1990s. And with the revival of its currency from the crisis,
the economy has been put on track of growth once again. Still, the
country has to manage and rectify the large inequality in income
that exists in the economy. Regarding the import and export limits
of the currency, the import is subject to a declaration if the
amount equals or stands greater than 10000 US dollars.
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Structure
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Mexican currency is managed and issued by the
central bank of the country i.e. Bank of Mexico.
It carries out the printing and minting function
as well. Mexican peso banknotes are issued
in 6 denominations that are 20, 50, 100, 200,
500 and 1000 pesos. The banknotes depict
portraits of important people in the history of
Mexico and backside of the notes shows various
important architectural structures. The
portraits and structures in the current series
are mentioned in the list below
- 20-peso note - image of former president
Benito Juárez on the front side and image
of a sculpture of Benito Juárez erected in
the Mexico City on the backside
- 50-peso
note - image of José María Morelos y Pavón
on the front side and an image of aqueduct
of the city of Morelia on the backside
- 100-peso
note - idealized representation of king of
Texcoco, Nezahualcóyotl on the front side
and on the backside there are images of
Xochipilli (god of florid song) and Xihuacóatl
(the fire serpent found in the Great Temple
of Tenayuca)
- 200-peso
note - portrait of Juana de Asbaje on the
obverse side of the banknote and the reverse
side shows a scene of the façade of the
temple of San Jerónimo
- 500-peso
note - portrait of general Ignacio Zaragosa
on the front and view of the bells and domes
of the Puebla cathedral on the backside of
the note
- 1000-peos
note - image of the "father of the
country", Miguel Hidalgo y Costilla on
the obverse side of the note and view of the
University of Guanajuato building on the
reverse side of the banknote
Regarding the coinage in
the currency, the coins are minted in a wide
range of face values starting from 5¢ to $100.
The coins are issued in as high as 11
denominations namely 5¢, 10¢, 20¢, 50¢, $1,
$2, $5, $10, $20, $50 and $100. The obverse
sides of all the coins have the national shield
of the country engraved on them. The reverse
sides of the coinage depict the face values of
the respective coins. The backsides of $10 coins
and above also show engraved images like the $10
coin possess image of the circle of the Sun
Stone representing Tonatiuh with the fire mask,
the $20 coin possess the image of the Miguel
Hidalgo, the $50 coin has an image of the Hero
Cadets of the Battle of Chapultepec and the $100
coin has the coat of arms of the country.
Recently, some measures
have been taken for the blind and the visually
challenged so that those people do not have any
difficulty in recognizing the banknotes. Tactile
patterns have been raised on $100, $200 and $500
banknotes such as 5 diagonal lines with a
negative slope on a $100 note, small broken up
square pattern on a $200 note and 4 broken
horizontal lines on the $500 bank note.
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| History |
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Peso, initially termed for the eight real coins, was
firstly introduced into Mexico by the Spanish.
Initially it was minted using pure silver as the base
component. Peso got popular from the very beginning
courtesy its distinct features and innovative security
measures of that time. Till 1785, it spread over
almost all of the North America and gained status as
the official currency system including United States.
Even when the United States dollar was launched for
the first time in 1792, its value was based upon peso
as it was issued at par with it. Much after the
introduction of dollar in United States, peso
continued to be the official currency in the country
i.e. till 1857. When Mexico got independent in 1821,
the newly formed government continued with peso as the
official currency to the country.
The first banknotes of the
currency were issued in the denominations 1, 2 and 10
pesos by Emperor Iturbide in 1823. In 1863, the first
issue of peso coins denominated in centavos was
minted. Soon after in 1866, coins of denomination 1
peso were minted under the reign of Emperor
Maximilian. In 1925, Bank of Mexico was established
and with time many other issues of coins and notes
were circulated. Mexican peso stayed stable during
most of the 20th century and was counted among the
strongest currencies in the world. In 1970, Mexico
encountered an oil crisis and due to that the currency
got constantly devalued until in 1993, it had to
introduce a new currency with the name "Nuevo
peso" and sign "N$" and exchange rate
N$1 = 1000 pesos. This new currency circulated for
almost three years until in 1996, the word "Nuevo"
was dropped and new bank notes and coins were issued
that are still in circulation today.
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| Factors
affecting the exchange rates between two countries
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The volatility in the foreign exchange rates
depends upon a numerous macro economic factors that
have different degrees of importance to different
economies of the world. Some special and exceptional
factors affecting the rates may also exist in the case
of different countries. Following are shown the common
factors on which the foreign exchange rate depends
- Flow of imports and exports between the
countries
- Flow of capital between the countries
- Relative
inflation rates
- Fluctuation limits on exchange rate
imposed by the governments of the countries
- Merchandise trade balance
- Rate of inflation in the country
- Flow of
funds between the countries for the payment of
stock and bond purchases
- Relative growth
- Short term
and long term interest rate differentials
- Cost of borrowings
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