The Mexican Peso ( Mxn )

1066 WordsAug 17, 20155 Pages
The Mexican peso (MXN) was originally based on Spain’s official currency, known as the silver dollar. The Mexican name originated from the 8-genuine coins, made from pure silver, that were issued by Spain from Mexico. It was the first currency to use a distinct border and precise weight to guard against counterfeits, which made it exceptionally well known. The peso had been at 12.5 to 1 dollar for around 22 years, from 1954 to 1976. In 1976, the Mexican peso decreased from 12.5 pesos to 1 dollar to 22 pesos to the dollar and continued to depreciate against the U.S. dollar during the next 16 years, to end up in December 92 at more than 3000 pesos to 1 U.S. dollar. In January of 1993, to facilitate foreign exchange, the government introduced the new peso, worth 1,000 of the old and divided into 100 centavos. Extreme international demand for Mexican stocks and high-yielding two-year treasury certificates known as CETES, kept the New peso at a reliable level of 3.1 New pesos per U.S. dollar for most of 1993. The Mexican peso declined as losses in bonds supported by United States subprime home loans led investors to avoid higher-yielding securities. The peso slid 1.6 percent in 2006. Defaults on bonds supported by United States subprime mortgages triggered $80 billion in write-downs and losses at the biggest banks and securities firms that year. In 1990 one U.S. dollar exchanged on average for 2.8 Mexican pesos. By 2007, the peso had fallen against the dollar by almost 75 %,

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