"Super Peso" effect - Article

"We are seeing a very strong growth in the trade deficit of Mexico and the United States. We are importing much more than we are exporting, we are seeing that tourists are having difficulties visiting our country."

Currency fluctuations and their ramifications are subtle and complex. A weaker currency does make it harder for tourists but it makes it easier for those businesses wanting to sell to the country whose currency has appreciated.

4/13/2024

@Padrino

Re ---> "A weaker currency does make it harder for tourists but it makes it easier for those businesses wanting to sell to the country whose currency has appreciated."

Yes and no, maybe or maybe not.
Basic answer: The gain in the value of the country's currency that has appreciated, probably was wiped out by inflation. It's a "wash".

Example: What used to cost US$10.00, that the purchase cost 200 pesos for when the USD was at 20 (using round #S to simplify my commnet), SHOULD now cost them 170, right? Probably not, Why?
Most likely with the recent high percentage inflation rate, generally between 10% - 40%,
that $10.00 item, now cost $12 - $13, or 204 - 221 pesos!

IF someone, for example has a fixed dollar payment, that is NOT affected by inflation, like a mortgage, then YES, they'll pay less pesos for THAT, and the "Super Peso" is a benefit for those who have pesos as their source of income.

Aside from that, I have asked several locals , if they have benefited from the current Super Peso at 17, vs the 20 per dollar X Rate.
The general response is NO, they have not particularly benefited.

Here's some local and general price inreases I've seen:
laundromat to 75 from 66.
laundromat to 100 from 75.
3 scoops premium ice cream to 75 from previous 60 (WAS a GREAT deal)
Dr. consultation to 800 from 600.
Small pizza to 165, from 120 - 130 range.
Sub sandwich to 150 from 100 pesos.
Doraditas to 19, from previous 15.
5,000 pesos ATM cash just paid $305.28 16.3784 X $1.00
way up from previous years 250-255.00 for that same amount of pesos.
copias to 2, from 1,
(though at López Impresores, they're still holding at 1 peso per copy & Impresiones para 1.50 ☺)
List goes on and on