Cambios still exchange..if not, they will prpbably go out of business. Other then the Euro, all other currencies are worse off then the dollar, (I think) so lets hope this doesn't spiral out of control. If it does, I will be going on some shopping sprees in the US whenever I am there with all bf's commissions :headbanger:
I was going to say.. rather than you all just throwing them away, I'll take them off your hands... I mean we don't want to add too much trash to the local dump... Jamie
That's not entirely true Tori - your friends to the north (Canada have a stronger currency today than you guys, 1 usd will get you 0.99965 Canadian), also the British pound, and the oil rich countries of the Middle East, like Bahrain where the dollar is less than 2:1 compared to the Dinar. I was getting close to 22 on the exchange from pounds to pesos - down to 18 now! I'd love the usd and pound at 1:1 and the pound to the peso at 35:1 - if that was the case I wouldn't have to dress in a polyester uniform each morning and sit in an ice cold office. Mexico's economy is doing good then right? Pay third world wages and make 1st world profits - good business plan! They are like "keep your dollars Gringos, we are on a roll" - although corruption will get the better of them always.
Currencies As far as currencies in general go, ToriB, we can say that relative values are approximately back to where they were before the crash, fall of 2008, which means, in part, that the USD has resumed its former status of a currency under pressure, and gradually (not suddenly, we hope) losing value against the others: if China does as the U.S. has been encouraging them to do, and allows the RMB to strengthen further, this slow, steady loss of value of the USD will accelerate. Many people have profited from this major swing because it involved, in some cases, as much as a 50% run up in value against the dollar, since March, last year. One of the exceptions is the euro, which has yet to regain its former value against the dollar, but the more important exception, for us, is the Mexican Peso which, to assume its former relationship to the dollar, still has about another 15% to go up in value, making it a fairly good bet for someone who wants to speculate a little (easier done here, where we can actually use the things, if they go the other way, for any reason!). [I mentioned on another thread that I've been burned every time I've bet on euros: it just seems particularly hard to predict which way they will move, for me, anyway.]
I'll go back to my origanal quetion, does anyone know if this is an effort to thwart drug money or is it a business decision. Maybe we can get an answer that isn't based on the international banking situation and global economics.
Possibly not, since that may lie behind any general reluctance to accept dollars. What does the Mexican Government do to dispose of all the USD it gets from its oil sales? The demand for USD, here, just may not be great enough to absorb all the USD flowing into the country. To get rid of large amounts of dollars, there've got to be people who want to buy things that are priced in dollars- purchases on the NYSE, buying U.S. Treasury bills, buying gold, buying imports from the U.S., the list is not limitless. As Steve reminded me, this thread is about the reluctance of local banks to take dollars: as long as he's been here, and with all he knows, he is not sure of the reason.
Steve gave an answer in post #6. When at the bank, my bf asked why and for how long, as a majority of his pay is in USD, and the young guy just said, because that is the policy now and indefinitely. I haven't really heard many people talking about it or himming and hauling either. So I guess it doesn't really matter why. It is what it is.
No demand for USD There could be more to it, than this, but during the time when the Mexican peso was falling in value, Mexicans would naturally have wanted to exchange their pesos for dollars, if possible. It appears the Banco de Mexico started the auction process mentioned above in the fall of 2008- at the height of the global financial crisis, and the beginning of the recession we're in- to guarantee a supply of dollars to Mexican banks to meet this need. The quote, above, indicates they were making as much as 400 million dollars a day available to the banks! This would have been necessary, in part, to prevent panic: so long as Mexicans could freely exchange their pesos for dollars, it offered them the assurance that, while the value of the peso had declined, it still had value against the dollar. The "currency" crisis passed fairly quickly, with the peso beginning to recover value against the dollar, mid 2009. They suspended the auction process, altogether, on 12 April, this year, there being no need of it. When the peso began to strengthen against the dollar, more and more Mexican would have decided it was safe to undo their dollar "reserve," and cash in their dollars for pesos. If the Mexican Government lacked a way to easily get rid of this excess (deluge) of dollars flowing back to the banks, they may have felt it useful for the banks in their system to stop taking dollars in exchange. There appears to have been a corresponding order, directed to the banks from the Banco de Mexico- to stop taking dollars in exchange for pesos- issued at or about the same time the auction process was suspended, but I haven't found the text for it, yet, so I haven't been able to confirm this. ______________________ Unrelated to the above developments was the effect of last week's global financial crisis. Not only did the peso fall in value against the dollar, but some merchants decreased the dollar to peso ratio, requiring even more dollars for a given purchase. It's been a topsy turvy world the last seven days, or so. ______________________
Direct transfer, U.S. to Mexico There are supposedly 420 U.S. banks that participate in a program established by the Federal Reserve Bank of the U.S. and the Banco de Mexico in which it is possible to transfer money directly to a Mexican Bank, with the Mexican Bank not being allowed to charge any commissions on the transaction, and the U.S. bank being limited to a $6 USD fee. Has anyone who reads this forum experimented with using that program; or, set up their Social Security or other retirement to direct deposit to a Mexican bank?
The dollar vs peso opened today at $12.60 Mxn to $1 USD or $13.10 if the bank is selling dollars. About noon it made one adjustment and closed at the price of $12.20/$12.70. The casas de cambio are all taking dollars as far as I know. I suspect that many of them end up in the bank anyway. I know that you can deposit dollars into your account at Banamex.
