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The super peso in Mexico and imports of capital goods

The super peso has influenced the growth of capital goods imports into Mexico after the Covid-19 pandemic.

Among all currency quotes against the dollar, the Mexican peso is one of the currencies that has appreciated the most.

On December 29, 2023, the exchange rate closed at 16.9190 pesos per dollar, an appreciation of 13.1% in dollar terms compared to the December 31, 2022 exchange rate. 

Capital goods are intended to increase a company’s fixed assets, such as transportation equipment, construction equipment, industrial buildings, specialized tools, information technology and machinery.

After falling 16.9% in 2020, imports of capital goods to Mexico grew 21.8% in 2021, at annual rates, according to Inegi data.

Then foreign purchases of these products increased 18.9% in 2022 and 20% in 2023, to $57.852 billion dollars.

Super peso in Mexico

North America is reconfiguring its supply chains and trade and investment flows with the relocation strategy by companies.

From January to April 2024, Mexican imports of capital goods were US$20.5 billion, an increase of 16.4% compared to the same period in 2023.

In the international context, since the last monetary policy decision in Mexico (on March 21), the Mexican peso’s exchange rate against the dollar exhibited episodes of volatility and depreciated marginally. 

Meanwhile, interest rates on government securities increased across the board. 

According to Banco de México, the Mexican peso has traded in an intraday range between 16.26 and 18.25 pesos per dollar since the last monetary policy decision. 

During the period, it depreciated by 1.30%, mainly affected by the lower global risk appetite, the growing geopolitical tensions in the Middle East and the liquidation of long positions in the currency.

Industry

Imports of capital goods into Mexico drive economic growth and the modernization of Mexican infrastructure and industry. 

Mexico imports these products to develop its infrastructure, modernize its industries and increase its productive capacity.