The Mexican Peso (MXN) is the official currency of Mexico, the third-largest country in the Americas.
The Peso was introduced in 1993, replacing the old Mexican Peso (MXP) at a rate of 1 new Peso = 1000 old Pesos.
The currency is managed and issued by the Bank of Mexico (Banco de México), Mexico’s central bank.
Subdivisions and Denominations
The Mexican Peso is subdivided into 100 smaller units called centavos.
Coins are issued in denominations of 5, 10, 20, and 50 centavos, as well as 1, 2, 5, 10, and 20 Pesos.
Banknotes are available in denominations of 20, 50, 100, 200, 500, and 1,000 Pesos.
Economy
Mexico has the 11th largest economy in the world by nominal GDP and is considered an upper-middle-income country.
The economy is diverse, with significant contributions from the manufacturing, services, agriculture, and mining sectors.
Mexico is known for its automotive, aerospace, and electronics industries, as well as being a major oil producer and exporter.
Foreign trade plays a vital role in Mexico’s economy, with the United States being its largest trading partner.
The North American Free Trade Agreement (NAFTA), now replaced by the United States-Mexico-Canada Agreement (USMCA), has boosted trade and investment between the three countries.
Exchange Rate System
The Mexican Peso operates under a flexible exchange rate system, which means its value relative to other currencies fluctuates based on supply and demand in the foreign exchange market.
The Bank of Mexico may intervene in the market to manage the exchange rate and maintain stability, particularly in relation to the US Dollar, given the close economic ties between the two countries.
Challenges and Prospects
Mexico faces several economic challenges, including income inequality, poverty, and vulnerability to fluctuations in global commodity prices.
The country is working to address these challenges through structural reforms, investments in education and infrastructure, and efforts to diversify its economy further.
Summary
In summary, the Mexican Peso is the official currency of Mexico, and its management falls under the responsibility of the Bank of Mexico.
The currency is subdivided into centavos, with coins and banknotes issued in various denominations.
Mexico has a diverse and growing economy, with significant contributions from various sectors.
The country operates under a flexible exchange rate system and faces economic challenges such as income inequality and vulnerability to fluctuations in global commodity prices.