Editing Economy of Mexico (section)

====Currency policy====
Mexico has a [[floating exchange rate]] regime.

The floating exchange originated with reforms initiated after the December 1994 peso crash which had followed an unsustainable adherence to a short band. Under the new system, Banco de México now makes no commitment to the level of the peso exchange rate, although it does employ an automatic mechanism to accumulate foreign reserves. It also possesses tools aimed at smoothing out volatility. The Exchange Rate Commission sets policy; it is made up of six members—three each from the Ministry of Finance and Public Credit (Secretaría de Hacienda y Crédito Publico—SHCP) and the central bank, with the SHCP holding the deciding vote.

In August 1996, Banco de México initiated a mechanism to acquire foreign reserves when the peso is strong, without giving the market signals about a target range for the exchange rate. The resulting high levels of reserves, mostly from petroleum revenues, have helped to improve the terms and conditions on debt Mexico places on foreign markets. However, there is concern that the government relies too heavily on oil income in order to build a healthy base of reserves. According to the central bank, international reserves stood at US$75.8&nbsp;billion in 2007.<ref>{{cite web |url=http://www.banxico.org.mx/SieInternet/consultarDirectorioInternetAction.do?accion=consultarCuadro&idCuadro=CF109&locale=es |title=CF109 – Reporte sobre las reservas internacionales y la liquidez |access-date=May 29, 2007 |language=es |archive-date=September 20, 2018 |archive-url=https://web.archive.org/web/20180920113124/http://www.banxico.org.mx/SieInternet/consultarDirectorioInternetAction.do?accion=consultarCuadro&idCuadro=CF109&locale=es |url-status=live }}</ref> In May 2003, Banco de México launched a program that sells U.S. dollars via a monthly auction, with the goal of maintaining a stable, but moderate, level of reserves.

From April 1, 1998, through April 1, 2008, the Peso traded around a range varying from $8.46 MXN per US$1.00 on April 21, 1998, to $11.69 MXN per US$1.00 on May 11, 2004, a 10-year peak depreciation of 38.18% between the two reference date extremes before recovering.

After the onset of the US credit crisis that accelerated in October 2008, the Peso had an exchange rate during October 1, 2008, through April 1, 2009, fluctuating from lowest to highest between $10.96 MXN per US$1.00 on October 1, 2008, to $15.42 MXN per US$1.00 on March 9, 2009, a peak depreciation ytd of 28.92% during those six months between the two reference date extremes before recovering.

From the $11.69 rate during 2004's low to the $15.42 rate during 2009's low, the peso depreciated 31.91% in that span covering the US recession coinciding [[Iraq War]] of 2003 and 2004 to the US & Global Credit Crisis of 2008.

Some experts including analysts at Goldman Sachs who coined the term BRIC in reference to the growing economies of Brazil, Russia, India, and China for marketing purposes believe that [[Mexico]] is going to be the 5th or 6th biggest economy in the world by the year 2050, behind [[People's Republic of China|China]], United States, [[India]], Brazil, and possibly [[Russia]].