The Mexican peso will weaken only modestly in 2023 through a gathering economic slowdown as confidence in the country’s moderate policies and manageable debt metrics remains high, a Reuters poll of currency strategists showed.
Having appreciated 2.2% from the start of the fourth quarter to 19.73 per U.S. dollar on Monday, Mexico’s currency is now trading close to its strongest levels since before the outset of the coronavirus pandemic.
In one year, the peso is seen changing hands at 20.16 per U.S. dollar, according to the median estimate of 22 strategists polled Dec. 1-5, 2.2% softer than this week but within its 18.0-22.0 range of the last five years, excluding a drop in early 2020.
The main challenges for the Mexican currency in the medium-term are a deteriorating economy and how Banxico, as the central bank is known, continues adapting to the U.S. Federal Reserve’s anti-inflation strategy.
Amid rising worries about a possible contraction in the world’s largest economy in 2023, private sector analysts expect growth in neighboring Mexico to slow to 0.95% next year from 2.8% in 2022.
“The U.S. recession will impact Mexico’s growth and USD flows into the economy could fall,” said Ricardo Aguilar, chief economist at Invex, who forecast the peso at 21.15 per U.S. dollar in one year.
However, the conservative approach of both Banxico and President Andres Manuel Lopez Obrador’s government continues to support financial sentiment in Mexico, with Fitch Ratings highlighting its prudent policies last month.
The Mexican central bank has increased its key interest rate by 600 basis points since mid-2021 to 10.0%. Banxico Governor Victoria Rodriguez has said at least one more increase is in the offing.
Year to date, the peso is up 3.9%, while the Brazilian real has gained 5.5%.
In the poll, Brazil’s currency was forecast to strengthen 2.1% from this week’s levels to 5.17 per U.S. dollar in one year.
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Receiving cash proceeds from retail sales imposes certain obligations on the organization. While settlements between organizations for the sale of goods, works and services are mainly made in non-cash form, settlements with individuals are usually made in cash, and less frequently by electronic means of payment.
In this cash sales journal entry we will consider in details drawing up of cash documents, accounting and tax accounting and accounting entries for retail proceeds that are received in cash from individuals. We will also touch on the need to use cash registers.
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