The Mexican peso’s exchange rate to the U.S. dollar, which has normally traded at 12:1, recently jumped to 19:1, putting a serious pinch on Mexicans’ wallets. For Mexicans, the widening exchange rate means it has suddenly become nearly twice as expensive to travel to the U.S. or buy U.S. goods.
As a result, currency exchange rates and inflation have strangely become the talk of the town —and not just among economists, but all Mexicans. Young people especially are slamming the government for trying to downplay the effects of depreciating currency on their daily lives.
Mexicans took to social media to blast two television anchors who suggested the rising value of the dollar hasn’t hurt the country’s economy or people’s purchasing power. In response to the harsh criticism, one of the anchors apologized and said she was simply reading what show producers had written on the teleprompter. The other anchor suggested Mexicans should stop complaining and work harder. “Que le chinguen más,” he said.
Mexicans, especially young people who are keen to purchase foreign-made products, are particularly upset about the steep depreciation.
The costs of items such as cellphones and video games have increased considerably as the peso plummets.
According to a report by Mexican daily El Financiero, the price of Star Wars toys in Mexico has jumped by 30% in recent months, while the cost of the popular MacBook Air has increased by 17%.
“Me every time the dollar goes up and I remember I have one in my wallet.”
The strengthening of the dollar against the peso has helped boost U.S. tourism to Mexico, but it has kept many would-be Mexican tourists at home as they postpone their trips abroad and wait for the peso to recover.
In fact, the peso is so weak right now that Guatemalans, whose quetzal is stronger by comparison, are crossing into southern Mexico to buy up the stock in local Walmarts and re-sell it back home for a profit.
The depreciation of the peso is coming as another strike against the administration of President Enrique Peña Nieto, who campaigned on the promise of economic growth and financial reforms. But Mexicans have yet to reap the benefits.
Even the centerpiece of Peña Nieto’s reforms, the opening of the state energy sector, is not fulfilling the promise of bringing down energy prices for average Mexicans. Gas pump prices in Mexico are higher than in many parts of the U.S.
Mexican officials are deflecting the blame by pointing at global economic forces, such as the fall in oil prices. But many are fed-up with the government’s reluctancy to acknowledge the slumping peso’s affect on their household economies.
Others are responding with bitter humor. There’s already a joke going around Mexico that if things keep up, the country’s iconic 20 peso bill could soon have the face of George Washington, or Jorge Guachinton.