Editing Mexican peso (section)

==History==

===Etymology===
[[File:Real de a ocho.jpg|thumb|right|150px|[[Spanish dollar]], 1761]]
The name was first used in reference to {{lang|es|pesos oro}} ('gold weights') or {{lang|es|pesos plata}} ('silver weights'). The Spanish word {{lang|es|peso}} means “weight”. (Compare the British [[pound sterling]].) Other countries that use the term {{lang|es|pesos}} for the currency  include: [[Argentine peso|Argentina]], [[Chilean peso|Chile]], [[Colombian peso|Colombia]], [[Cuban peso|Cuba]], [[Dominican peso|Dominican Republic]], [[Philippine peso|the Philippines]], and [[Uruguayan peso|Uruguay]].<ref>{{cite web|url=http://www.banderas-mundo.es/moneda/peso|website=Banderas de Estado del mundo|title=Moneda: peso|access-date=July 18, 2019|language=es|trans-title=Currency: peso|archive-date=July 18, 2019|archive-url=https://web.archive.org/web/20190718203805/http://www.banderas-mundo.es/moneda/peso|url-status=live}}</ref>

===Precursor===
{{See also|Spanish dollar|Spanish colonial real|Mexican real|Spanish escudo}}
[[File:8 reales Mexico - 1840 GoPJ.png|thumb|250px|Silver peso or 8 reales of "cap and ray" design used for East Asian trade, 1840]]

The currency system in use in [[Spanish America]] from the 16th to 19th centuries consisted of silver ''[[Spanish colonial real|reales]]'', weight 3.433&nbsp;grams and fineness {{frac|67|72}} = 93.1%, as well as gold [[Spanish escudo|escudos]], weight 3.383&nbsp;g and fineness {{frac|11|12}} = 91.7%. By the 19th century the silver real weighed 3.383&nbsp;g, fineness {{frac|65|72}} = 90.3%, while the gold escudo's fineness was reduced to 21 [[karat]]s or {{frac|21|24}}, or 87.5% fine.

15 or 16 silver ''reales'' were worth a gold ''escudo'', and eight-real coins of 24.44&nbsp;g fine silver were widely called ''pesos'' in Spanish America and ''[[Spanish dollar|dollars]]'' in Britain and its American colonies. These pesos or dollars were minted from the rich silver mine outputs of modern-day Mexico and [[Bolivia]] and exported in large quantities to Europe and Asia. These pesos served as a global [[silver standard]] [[reserve currency]] until the start of the 20th century, and became the model for the various pesos of Spanish America as well as (among others) the [[United States dollar]], [[Chinese yuan]] and the [[Japanese yen]].<ref>{{cite web|url=https://nationalinterest.org/feature/the-silver-way-explains-how-the-old-mexican-dollar-changed-20410|title='The Silver Way' Explains How the Old Mexican Dollar Changed the World|first=Salvatore|last=Babones|date=April 30, 2017|website=The National Interest |url-status=live |archive-url= https://web.archive.org/web/20231001020247/https://nationalinterest.org/feature/the-silver-way-explains-how-the-old-mexican-dollar-changed-20410 |archive-date= Oct 1, 2023 }}</ref> Mexican silver pesos of original cap-and-ray design were legal tender in the United States until 1857 and in China until 1935.

==={{anchor|MXP}}Origin===
The first Mexican mint to produce pesos was established in 1535.<ref>{{Cite journal |last=Andrew |first=A. Piatt |date=1904 |title=The End of the Mexican Dollar |url=https://www.jstor.org/stable/1884074 |journal=The Quarterly Journal of Economics |volume=18 |issue=3 |pages=321–356 |doi=10.2307/1884074 |jstor=1884074 |issn=0033-5533}}</ref>

While the United States divided their dollar into 100 cents early on from 1793, post-independence Mexico retained the peso of 8 reales until 1863 when the [[Second Mexican Empire]] under [[Maximilian I of Mexico|Emperor Maximillan]] commenced the minting of pesos divided into 100 centavos. The [[Restored Republic (Mexico)|restored Mexican republic]] under [[Benito Juárez]] and [[Porfirio Díaz]] continued the minting of centavo coins in base metal or silver, as well as gold coins in pesos, but it had to revert the silver 1-peso coin to the old eight reales "cap-and-ray design" from 1873 to 1897 after East Asian merchants rejected or discounted the newly designed peso coins.

The post-independence silver peso contained 27.07 grams of 90.3% fine silver (24.44 g fine) while the gold peso or half escudo contained 1.6915 grams of 87.5% fine gold (1.48&nbsp;g fine). After most of Europe switched to the [[gold standard]] in the 1870s the gold peso substantially rose in value against the silver peso, until it became 2 silver pesos to a gold peso or a gold peso dollar by 1900. In 1905 the peso was solely defined as 0.75&nbsp;g fine gold.

From 1918 onward the weight and fineness of all the silver coins declined, until 1979, when the last silver 100-peso coins were minted. The [[U.S. dollar]] was worth 2.00 silver pesos from 1905 to 1929, rising afterward until it stabilized at 12.50 pesos from 1954 to 1976.

=== {{anchor|Nuevo peso}}{{anchor|MXN}}Reformation ===
Throughout most of the 20th century, the Mexican peso remained one of the more stable currencies in Latin America, since the economy did not experience periods of hyperinflation common to other countries in the region.

====Devaluations in 1976 and 1982====
The U.S. dollar leapt from 12.50 to 19.40 pesos in 1976.  After the [[1979 energy crisis|oil crisis]] of the late 1970s, Mexico defaulted on its external debt in 1982, causing severe [[capital flight]] and several years of inflation and devaluation. The dollar again rose from 23 to 150 pesos that year,<ref>{{cite web|url=https://bfi.uchicago.edu/wp-content/uploads/The-Case-of-Mexico.pdf|title=The Case of Mexico|author=Felipe Meza|date=January 2019|website= Becker Friedman Institute for Economics at University of Chicago |url-status=live |archive-url=https://web.archive.org/web/20230418042339/https://bfi.uchicago.edu/wp-content/uploads/The-Case-of-Mexico.pdf |archive-date= Apr 18, 2023 }}</ref> causing any company with loans in USD and contracts in MXP to have their financial position weakened by the devaluation, the result becoming high unemployment and pressure on remaining employees to pick up the increased workloads and putting strain on economic hardships.<ref>Joan Anderson and Roger Frantz, “The Response of Labour Effort to Falling Real Wages: The Mexican Peso Devaluation of February 1982", World Development 12, no. 7 (1984): 764.</ref> Government attempts to fix the economy with an inward-looking industrialization strategy were only sustainable with severe economic imbalances that needed large inward capital flows that could not be maintained, and an abrupt process of stabilization and adjustment followed that saw a recession in 1983,<ref>Moritz Cruz, Edmund Amann, and Bernard Walters, “Expectations, the Business Cycle and the Mexican Peso Crisis", Cambridge Journal of Economics 30, no. 5 (2006): 706.</ref> stabilizing only in the early 1990s at above 3,000 MXP/USD when a government economic strategy called the "Stability and Economic Growth Pact" ''(Pacto de estabilidad y crecimiento económico, PECE)'' was adopted under [[President of Mexico|President]] [[Carlos Salinas]].

====New peso, 1993====
On January 1, 1993, the [[Bank of Mexico]] introduced a new currency, the {{lang|es|nuevo peso}} ("new peso", or MXN), written "N$" followed by the numerical amount.<ref name="Darling">{{cite news |url=https://www.latimes.com/archives/la-xpm-1993-01-01-fi-2969-story.html |title=New Pesos Introduced in Mexico : Currency: Starting today, an old 1,000-peso bill is worth 1 new peso, but both are still valued at about 33 cents. |date=1 January 1993 |work=[[Los Angeles Times]] |access-date=25 August 2018 |last=Darling |first=Juanita |archive-date=3 September 2018 |archive-url=https://web.archive.org/web/20180903144020/http://articles.latimes.com/1993-01-01/business/fi-2969_1_100-peso-note |url-status=live }}</ref> One new peso, or N$1.00, was equal to 1,000 of the obsolete MXP pesos.<ref name="Darling" />

====New peso notes and coins====
{{multiple image |align=right |direction=vertical |title=Series A and B banknotes
|image1=Banco de México A $20000 obverse.png |caption1=MXP $20000 (Series A, 1985)
|image2=Banco de México B $20 obverse.png |caption2=MXN $20 (Series B, 1993)
}}
The transition was done with minimal confusion by issuing the Series B "nuevo peso" banknotes in N$10, $20, $50, and $100 denominations with designs nearly identical to the corresponding banknote in the preceding Series A, which were labelled in old pesos (MXP $10,000, $20,000, $50,000, and $100,000, respectively); for Series B, the equivalent nuevo peso face value was {{frac|1|1000}} of the old peso face value for Series A. For example, the Series A old peso MXP$20,000 and the Series B nuevo peso MXN$20 banknotes share the same design, aside from the updated face value. Old and new pesos circulated simultaneously between 1993 and 1995, but old peso Series A banknotes were gradually retired at this time, and newly designed Series C "nuevo peso" banknotes commenced in 1994. From January 1, 1996, the "nuevo peso" was simply renamed to "peso", and new Series D banknotes were issued identical to Series C except for the word "nuevo" dropped. The ISO 4217 code remained unchanged as MXN. Series A and AA banknotes were demonetized and no longer legal tender as of January 1, 1996.<ref name=SeriesA-AA-done>{{cite web |url=https://www.banxico.org.mx/banknotes-and-coins/demonetized-banknotes-and-coi.html |title=Demonetized banknotes and coins |publisher=Banco de México |access-date=29 April 2022 |archive-date=1 July 2022 |archive-url=https://web.archive.org/web/20220701104901/https://www.banxico.org.mx/banknotes-and-coins/demonetized-banknotes-and-coi.html |url-status=live }}</ref> Although they remain legal tender, Series B, C, D, and D1 banknotes are in the process of being withdrawn from circulation; in addition, the MXN$1000 Series F banknote is being withdrawn.<ref name=Gradually/> The most commonly circulated banknotes in Mexico are MXN$20 and above in Series F and G.

Similarly, Series B coins in nuevo peso denominations were circulated starting from 1993<ref name=Gradually/> and Series A and AA coins were demonetized starting from November 15, 1995.<ref name=SeriesA-AA-done/> Unlike the notes, Series B coins differed in size and design from the Series A coins. Series C coins (which dropped the "N$" prefix on the MXN$1, N$5, N$10, N$20, and N$50 coins) were circulated starting in 1996 following the withdrawal of Series A and AA coins. Series B and C coins in uncommon denominations (10-centavo and MXN$20 and greater) are gradually being withdrawn from circulation. Although they remain legal tender, they are set aside when they arrive at commercial banks.<ref name=Gradually>{{cite web |url=https://www.banxico.org.mx/banknotes-and-coins/in-the-process-of-being-withd.html |title=In the process of being withdrawn from circulation |publisher=Banco de México |access-date=29 April 2022 |archive-date=29 April 2022 |archive-url=https://web.archive.org/web/20220429144955/https://www.banxico.org.mx/banknotes-and-coins/in-the-process-of-being-withd.html |url-status=live }}</ref> The most commonly circulated coins in Mexico are MXN$10 and below in Series C and D.

====Economic effects====
The government's operational balances had been predicted to remain stable as the country was operating in a surplus between 1990 and 1994. This crisis was seen as the fault of the Mexican government in its signing of [[NAFTA]] at the beginning of 1994. The volatility of MXN increased after the ratification of NAFTA, when the annualized standard deviations seem to be highest post-1994, especially in terms of USD, compared to the United States, which experienced the lowest annualized standard deviation during that same period.<ref>Mahfuzul Haque, Oscar Varela, and M. Kabir Hassan, “Safety-First and Extreme Value Bilateral U.S.–Mexican Portfolio Optimization around the Peso Crisis and NAFTA in 1994", The Quarterly Review of Economics and Finance 47, no. 3 (2007): 455.</ref> Still, several contemporary economists of the time noted the unexpected shocks to the economy during 1994, which exacerbated the situation, starting with the assassination of presidential candidate Luis Donaldo Colosio, causing a ripple effect on the exchange rate and interest rates that resulted in increased capital leaving the country. The result was the devaluation of MXN because of a domestic recession and an avalanche of investor withdrawals due to concern about the government's inability to remain liquid in its international debt repayments.<ref>Jeffrey Sachs, Aaron Tornell, Andrés Velasco, Francesco Giavazzi, and István Székely, “The Collapse of the Mexican Peso: What Have We Learned?", Economic Policy 11, no. 22 (1996): 16-18.</ref> The international outlook, particularly in Wall Street, on the MXN peso crisis was affected by the lack of information on Mexico's financial reserves from the Banco de Mexico, which only released information on Mexico's reserves three times a year, and the speed of reserve depletion to stabilize the MXN finally resulted in a 15% devaluation by 20 December 1994 and a lack of clear announcements on how the Mexican government was going to handle the crisis. In one day, Banco de Mexico lost USD 4 billion in holdings.<ref>Sebastian Edwards, “The Mexican Peso Crisis: How Much Did We Know? When Did We Know It?", World Economy 21, no. 1 (1998): 24-25.</ref>  The 1994 crisis was more devastating as it was released on a new peso currency. The adoption of MXN in 1993 was meant to balance the economy, and MXP 1000 was the same as MXN 1 upon its 1993 introduction. The MXN crisis let investors in 1995 see a failure of Mexican authorities to act with a lack of preparation to soften the devaluation with a more substantial commitment to maintaining the stability of the exchange rates and questioning further investment in the economy.<ref>Pierre-Richard Agénor and Paul R. Masson, “Credibility, Reputation, and the Mexican Peso Crisis", Journal of Money, Credit and Banking 31, no. 1 (1999): 83.</ref> As the GNP fell by 9.2% in 1995, the panic of the MXN devaluation was significant to Mexican citizens, as the peso depreciated against the USD by 82.9%, while the interest rates rose from 10.5 to 42.7%.<ref>Cruz, et al., “Expectations, the Business Cycle and the Mexican Peso Crisis", 719.</ref> The unemployment rates of married male employees increased significantly in urban areas of Mexico, resulting in married women and teenagers from the same households finding employment to prevent the financial collapse of domestic quality of life. Married women with an unemployed husband experienced an employment rate of 33.84% and an unemployment rate of 1.62% compared with unmarried women during this period.<ref>Emmanuel Skoufias and Susan W. Parker, “Job Loss and Family Adjustments in Work and Schooling during the Mexican Peso Crisis", Journal of Population Economics 19, no. 1 (2006): 167.</ref> The unexpected increase in Mexican immigration, both legal and illegal, in 1995 resulted from the MXN devaluation, pushing Mexican citizens to seek better employment opportunities in the United States. Migration in 1995 was 40% higher than the average level of the rest of the 1990s, with 200,000 to 300,000 more Mexicans immigrating over the border, increasing a labour shock in Mexico that also affected parts of the southwestern United States.<ref>Joan Monras, “Immigration and Wage Dynamics: Evidence from the Mexican Peso Crisis", The Journal of Political Economy 128, no. 8 (2020): 3020.</ref> There was a significant decline in Mexican household expenditure during this time, where durable and semidurable commodities like televisions, glassware, clothing, and other goods that could be postponed fell between 1996 and 1998, while household food expenditure increased, with lower income households seeing an increase of 3.5% and middle-class households seeing a 2.4% increase, due to the resulting inflation of prices.<ref>McKenzie, “The Consumer Response to the Mexican Peso Crisis", 147.</ref> MXN finally started to see a stabilization between 1996 and 1998, once the Mexican government had enacted banking rescue packages to prevent further collapse, resulting in state control over a large majority of the Mexican financial sector, which led to a renewed growth in the economy that saw more stability by the turn of the millennium.<ref>Cruz, et al., “Expectations, the Business Cycle and the Mexican Peso Crisis", 719-720.</ref>

==== Subsequent exchange rates ====
*Following the revaluation in 1993, the official exchange rate was MXN$3 against the [[U.S. dollar]].
*After the [[Mexican peso crisis]] of December 1994, the peso sharply depreciated from MXN$3.4 to MXN$7.2 in 1995.
*It then traded between MXN$8 and MXN$11 from 1998 to 2008, briefly depreciated to MXN$15.56 in March 2009 due to the [[2008 financial crisis]], but then settled between MXN$12 and MXN$14 from 2009 to 2014.
*The peso then depreciated from MXN$14.78 in 2014 to MXN$17 in 2015.
*From 2016 to 2019, it traded between MXN$18 and MXN$20.
*Amidst the [[COVID-19 pandemic]], the peso depreciated to its all-time low of MXN$25 per dollar.  
*From 2020 to 2024, it appreciated by over 30%, becoming one of the best performing currencies in the world.  In April 2024, the peso reached a near nine-year high of MXN$16.26 per dollar.  This was mostly attributed to the growth of "near-shoring" strategies, growing foreign investment, as well as the strict monetary policy adopted by the [[Bank of Mexico]] in attempts to curb inflation following the COVID pandemic and the [[Russian Invasion of Ukraine]].<ref>{{Cite web |title=US Dollar Peso Exchange Rate (USD MXN) - Historical Chart |url=https://www.macrotrends.net/2559/us-dollar-mexican-peso-exchange-rate-historical-chart |url-status=live |archive-url=https://web.archive.org/web/20211120214732/https://www.macrotrends.net/2559/us-dollar-mexican-peso-exchange-rate-historical-chart |archive-date=2021-11-20 |access-date=2021-11-20}}</ref><ref>{{Cite news |date=7 March 2023 |title=Mexico's peso hits five-year high on interest rates and US benefits |url=https://www.ft.com/content/45185d78-3f90-4404-a721-55945c4a6841 |url-status=live |archive-url=https://web.archive.org/web/20230308130253/https://www.ft.com/content/45185d78-3f90-4404-a721-55945c4a6841 |archive-date=8 March 2023 |access-date=8 March 2023 |newspaper=Financial Times}}</ref>
*Soon after the [[2024 Mexican general election|Mexican general elections]] in June 2024, the peso sharply depreciated to over MXN$18.  It continued to lose value throughout the remainder of the year, and is currently trading between MXN$19 and MXN$20.