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Mexican currency (Mexican Peso, MXN) in forex
Earlier, Mexico was one of the viceroyalties of Spain from the year 1535. During this time, the Escudos were the first coins of Mexico and they were minted by the decree in 1535.But later, the silver peso was introduced as the legal tenders in the year 1732. It also developed as one of the major trading currencies. During the 16th to the 19th century, more than 3 billion Mexican pesos were thereby minted.
Once again during the Mexican revolutions, the monetary chaos had occurred in the country, ranging from 1910 to 1917. One of the major reasons which caused the jeopardizing of the economy was the issuance of the order that the country had to pay for the war. Till that time, paper money had entered the market and the respective depreciation of their money has already occurred. Later in the year 1916, Mexico currency retraced to the silver standards. But it was in the year of 1918 when the Mexican Peso was made the official currency of the country.
Mexico Central Bank
After the earnest organizational and budget efforts of the President Plutarco Calles, the operating of Banco de Mexico started from 1st September 1925. One of the main works of the Central Bank of Mexico was to issue currency circulations and implement the regulations in Mexico.
Moreover, the bank also had to face initial hesitations in terms of gaining the trust of the citizens into paper money after the last failure of the paper money and its jeopardized historical significance. Then in 1969, the printing house for currency of the bank started with the respective operations, which played a pivotal role in the restoration process.
In the year 1991, the Monetary System of United Mexican States was implemented. This newly introduced unit was equivalent to 1000 pesos of the earlier trading unit. This newly introduced unit was called as "new pesos". This was done to differentiate them from the earlier pesos.
1994 Currency Crisis
Some time after the President Zedillo took over the office, Mexico unfortunately entered into one of the most jeopardizing currency crises, every faced by the country in the past. Thus, to lessen the impact of the crisis, Zedillo publicly announced that the Bank of Mexico would not try to defend the mushrooming high currency rates. At the same time, he also declared that the Mexican peso would be allowed to float freely against the respective trade values of the US dollars.
This implementation bought a tremendous impact on the forex trade market. The main reason was the ambiguity created in the exchange rates. The dropping of the exchange rates basically meant the falling of 3 pesos to one dollar to suddenly rate of 10 pesos to one dollar.
This crisis had been summoned as the "December mistake" and the main reason behind it was the Zedillo's decision to allow the free floating of the peso with respect to the US dollars.
Global Recession and Mexican pesos
The global recession had a major impact on the currency trading and forex market of Mexico. In this very context, Guillermo Ortiz, the Governor of the Central bank said that the wide gap which is being constructed in between the US and Mexican interest rates would cause inflationary pressure and also add to the jeopardizing of the economy in the longer run. He has also mentioned that if the situation continues, the monetary policy would be adopted by the Central bank.
In a nutshell, the Mexican peso has witnessed several twists and turns, and right now, it continues to be effected by the global recession.