This article is written by Austin Garcia
The Super Peso
In the world of money, the Mexican Peso, sometimes called the “super peso,” has become a strong performer. It was often ignored before, but now investors favor it. In 2023, it did better than all other currencies. It reached its highest real value since 2005. This made investors rethink their doubts.
The Peso’s history began with the silver 8-real coin. This was based on Spain’s currency. It was used until the mid-1800s. Then, centavos coins were added. They were worth one-hundredth of a peso. These coins lasted until the mid-1900s. But their gold content kept falling. In 1993, Mexico faced big inflation. Its currency lost much value. This followed Mexico’s debt default in the 1980s. So, Mexico launched the nuevo peso. It replaced the old peso at a 1:1,000 rate.
The Key to Nershoring
The Peso has gained a lot in recent years. Record money sent home (remittances), nearshoring, and more investments helped. It saw its biggest yearly gain against the dollar since 2016, climbing 25%. High interest rates led to a 40% surge in foreign direct investments. This makes Mexico a top manufacturing spot for global companies. Nearshoring with the U.S. has made Mexico less dependent on countries like China. Between 2022 and 2023, Mexico’s goods imports to the U.S. rose by 5%. This reached over $475 billion. Mexico passed China as the leading U.S. importer for the first time in two decades.
However, not everything is perfect. Despite its growth, the Peso’s performance is not as good as some other rising currencies. Slow growth in the first quarter of 2025 (Q1 2025) was due to a drop. Manufacturing fell, and so did agriculture. Services partly offset this. The upcoming presidential elections also create pressure. Historically, the Peso tends to weaken by 5% to 7% before Mexican presidential elections. For example, in 2024, the peso depreciated by about 19% by year-end, with a sharp drop after Mexico’s June election when the ruling Morena party won enough seats to potentially change the constitution. The upcoming elections in both Mexico and the United States will impact the currency. However, the Peso’s performance is still expected to be strong among emerging markets. It usually recovers after a few days. The big question remains: How will the Peso do with slower growth and the upcoming elections? Only time will tell.
