Peso hits new record low; more weakening expected

Mexico’s peso fell sharply against the dollar on Tuesday Jan. 10 with some banks in Mexico City offering up to 22.16 pesos per dollar, and the chief of the Organisation for Economic Co-operation and Development said further depreciation was “almost inevitable.”

The peso was the worst-performing major currency last year, weakening 20 percent against the dollar as Donald Trump closed in on the U.S. presidency.

The depreciation has picked up pace in the first days of 2017 after President-elect Trump told major automakers to expect high taxes on vehicles made in Mexico. The peso has fallen more than 4 percent against the dollar since Jan. 1, according to Reuters.

“It’s foreseeable, I’d say almost inevitable that it keeps on depreciating,” OECD Secretary General Jose Angel Gurria said in Mexico City.

Gurria said Mexico’s central bank, which sold $2 billion in dollar reserves last week to support the peso, had helped prevent a deeper crash, but warned it could not burn through too many greenbacks.

Source: reuters.com