The Mexican peso has remained strong, even during the economic downturn caused by the COVID-19 pandemic. Mexico’s economy is doing surprisingly well compared to other countries, and this begs the question—why? In this blog post, we will explore why Mexico has been able to weather the financial storm of COVID-19 while other countries have struggled.
The peso last month hit pre-pandemic levels and has appreciated over 5% versus the U.S. dollar in 2022, making it one of the best-performing global currencies alongside Brazil’s real .
The key to understanding why Mexico’s economy has done so well during the pandemic lies in the country’s policy decisions. Unlike some other countries, Mexico chose not to impose a forced lockdown on its economy. Instead, it implemented targeted measures such as limits on public gatherings and travel restrictions that managed to effectively control the spread of COVID-19 without significantly damaging its economy. This strategic decision was crucial in allowing Mexico’s economy to remain relatively unscathed from the pandemic.
Fiscally Conservative
The second factor that contributed to Mexico’s economic resilience is its conservative approach towards printing money. Unlike many other nations, Mexico did not embark on an unprecedented quantitative easing program in an effort to stimulate its flagging economy. This decision helped protect against inflation and also meant that investors continued to have faith in the stability of the peso despite global economic uncertainty caused by COVID-19.
Diversified Economy
Finally, another reason for Mexico’s success can be attributed to its diverse range of exports and its strong manufacturing sector. Despite a decrease in demand for commodities due to decreased global trade activity during 2020, Mexico still managed to maintain its exports thanks largely to these two factors. It also helped that many non-essential goods are produced in low cost regions of Mexico; this enabled companies based there to remain competitive even when faced with plummeting demand levels worldwide.
Mexico Could maintain its strength going forward.
In summary, there are several factors behind why Mexico’s peso has remained strong throughout 2019-2022 despite a global recession caused by COVID-19. From choosing not to impose a hard lockdown on its economy or print large sums of money like some other nations have done during this time, through to having a diverse range of exports and a strong manufacturing sector that helps keep costs down – all these elements have combined together enabling Mexicans to weather what has been an extremely challenging year financially for much of the world’s population. As more nations look towards 2023 with hope that things will start returning back closer towards normalcy again soon, it is likely that many other countries will look at how they can learn from what happened in Mexico in 2020 as they attempt their own economic recoveries over coming months too again soon once again now. Thank you for reading!
