An interesting read on Mexico's economic outlook: http://www.economist.com/displayStory.cfm?story_id=14917758 It seems to me that stability between the peso and the dollar is important, maybe more important than the actual exchange rate. When we see large changes in that ratio people here flip out and make rash changes. And they try to guess which way the rate is going to go. Seems to me, from my layperson's perspective, that when there's a lot of guessing and emotion involved that it's not good for the economy, that people aren't focusing on long term positive changes. I get paid in dollars and keep most of my dollars in the US. And both my job and my hubby's are not tourism related. So we just plod along economically oblivious to the ups and downs of tourism, and largely oblivious to the xrate changes. We do sometimes pay for things with a US credit card instead of pesos because of our current thinking on xrates, sometimes that's advantageous. But mostly we ignore the whole mess. If I decide to sell my properties here though I would like to see the peso be strong against the dollar, but it can be weak until then, that's ok with me. Haha.
That's interesting, and certainly food for thought. For example, now that the Peso has been as low as 15 (briefly), but had a sustained value at between 13.3 and 14...what would the effect of a long term valuation of say, 11.5 to 12 per dollar? If I remember correctly, the Peso was at about 10.5 from the time I first came here in late 2005, to the time when it dipped to below 10, but then shot up to the aforementioned 15, in 2008. That was at least 3 years of a pretty stable Peso, and everybody seemed happy. But diping from 13.3 to 11.5, I can imagine that the tourism-fed economies like Cancun would really suffer....and I wonder what the effect would be on other parts of Mexico, that don't have a tourist trade? Would prices fall? Somehow I don't think so. But I too am in favor of a more stabilized Peso.
