Peso/Dollar

Discussion in 'Living in Cancun' started by davisod, Oct 26, 2008.

  1. davisod

    davisod Addict Registered Member

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    I was under the impression that the peso had been pegged loosely to the US Dollar by the World Bank, but obviously I'm wrong. Can anyone explain the dollar/peso arrangement since the big financial crisis in Mexico of the 1990's please?

    TY
     
  2. Steve

    Steve Administrator Owner

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  3. RiverGirl

    RiverGirl Guest

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    Well, I don't have a deep understanding of this either. What I do understand is that the dollar is strong because people are pulling money out of the stock market. So I imagine the dollar will stay high against the peso as long as there is this panic in the market.
     
  4. Cancun Fun

    Cancun Fun Guest

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  5. Life_N_Cancun

    Life_N_Cancun Guest

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    I think I'll start wall-papering my place with my pesos stash I've been saving since the plastic material they're made of wont make for a good toilet paper substitute. :bashself:
     
  6. T.J.

    T.J. I can choose my own title Registered Member

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    I read the original question a bit different than the other responders.

    Back in the early 90's $1 US bought you over $3,000 pesos. Inflation was nuts at the time. I can rember having a handful of $100,000 peso bills. It was so bizzare to pull out 3 of them to pay for a real nice meal. But in dollars they were worth $30 or so each.

    In 1994 or so, and I think the World Bank had something to do with this, the peso was put on par with the dollar. That is, one dollar bought one peso. This was shortly after the Bank of Mexico, and I think this was in 1993, came out with the NP or Nuevo Peso. You could exchange $1,000 of the old pesos for $1 of the new ones. The coins then became 2 tone and the bills had NP on them.

    Since then, Mexico's inflation has risen faster than that of the US, hence the difference in their relative values today since the purchasing power was less, so you get more USD, GPB or whatever. But the inflation is nothing compared to what it was in the early 90's so the relative value has sort of almost leveled off in the 10 to 1 area over the last 3 or 4 years. I am operating on memory and not facts from a website so I might not be "spot on" as Steve would say, but I think I am close.

    Was this sort of what you were asking Davisod?
     
  7. davisod

    davisod Addict Registered Member

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    Thanks TJ.....that's what I was trying to find an intelligent response to....leave it to you, right?

    No offense to the others - God love ya - because I actually thought, "They'll think I'm stupid, so I'm not sure if I should ask"....hahaha.

    It's a more complicated a thing than I thought, and I knew it wasn't pegged to the US dollar formally or the exchange difference in these crazy days would reflect that more. But then again, I don't understand things nowadays at all. Our Cdn. dollar was a bit higher than or on par with the US, then Wall St. buckles, and even though our oil and banks are proven to be strong, our dollar is free-falling compared to yours....why - it's crazy!
     
  8. RiverGirl

    RiverGirl Guest

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    From what I understand the US dollar is strong for one reason right now, lots of folks are dumping stocks (or were) and have put their money in dollars (into cash). When the stock market stabilizes, and people start buying into it again, the US dollar will probably start to slip down again, if it hasn't already.
     
  9. Jim in Cancun

    Jim in Cancun Guest

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    I have lived here for over 21 years. The Mexican peso has never been 1:1 to the USD. The Argentinian peso was when they had their devaluation.
     
  10. Jim in Cancun

    Jim in Cancun Guest

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    The folowing is from http://en.wikipedia.org/wiki/United_States_dollar

    Historical exchange rates
    Currency units per U.S. dollar, averaged over the year.[28] * = value at start of year.
    1980*= 22.800
    1985*=206.97
    1990*=2,679.50
    1993=3.1237 (The New Peso came into existence on Jan 1. 1993 by basicall just taking off the 3 zeros
    1999=9.553
    2000=9.459
    2001=9.337
    2002=9.663
    2003=10.793
    2004=11.290
    2005=10.894
    2006=10.906
    2007=10.928

    Other interesting graphs on a yearly basis can be found at :
    (May of 2008-10/31/2008: http://www.exchange-rates.org/history/MXN/USD/T

    (Graph 2003-2008) http://www.indexmundi.com/xrates/graph.aspx?c1=MXN&c2=USD&days=1825&lastday=20081020

    And you can take this link (http://www.x-rates.com/d/MXN/USD/hist2002.html ) and just change the year in the url and get a yearly and monthly rate from 1993-2008.

    I really should get a life.
     
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