How the ‘superpeso’ became so super

More stories

Yucatán Magazine
Yucatán Magazine
Yucatán Magazine has the inside scoop on living here. Sign up to get our top headlines delivered to your inbox every week.
Photo: Getty

Mexico isn’t the bargain it used to be. And the trend is toward luxury, not rustic digs.

The peso — now called the “superpeso” — is having a record-breaking year, stronger than it’s been in more than five years, up 9.5% in 2023 alone. A dollar bought about 20 pesos a year ago, and today, it’s worth under 18.

Still, traveling to Mexico is more popular than ever among foreigners, and the food and lodging options have gotten more luxurious. And tourists are paying luxury prices for them.

Nearshoring is also fueling the economy, bringing the supply chain closer to markets in the U.S., which shares a 2,000-mile border with Mexico.

BMW is spending more than $860 million to expand its electric-vehicle production in Mexico, and Tesla plans to build a factory in Monterrey. Those two announcements also strengthened Mexico’s currency.

Foreign investment has been at its highest level since 2015. According to Hotel Investment Today, Mexico leads Latin America’s hotel development pipeline with 203 projects in the works totaling 33,475 rooms. 

COVID-era austerity policies also helped, despite the suffering they caused at the time. 

Mexico’s refusal to infuse the economy with stimulus during the pandemic strengthened the peso versus economies/currencies that printed a lot of money, said Zach Rabinor of Journey Mexico.

“The peso’s high carry, enhanced by an extra hawkish Banxico, lack of political noise compared to peers, its status as a US proxy, still strong remittances, and the trend of nearshoring back the MXN,” said Alejandro Cuadrado, global head of FX strategy at BBVA in New York. These factors “have reduced the peso’s volatility and made it asymmetrical: particularly resilient to wobblier global risk and the USD push elsewhere.”

Expats living on Social Security are also getting squeezed, as are Mexicans who receive remittances from family earning dollars in the US. 

A strong peso makes the prices of goods from Mexico more expensive in relative terms, which makes these products less attractive and reduces their demand in international markets.

- Advertisement -spot_img

Love Yucatán? There's A Free Newsletter Just For You.

The Yucatán Magazine Roundup sends headlines to your inbox every week. Unsubscribe at any time.