Navigating Mexico: Thinking out Loud with a Dollar

Photo: Google


The Mexican peso has not been as strong as it is now in close to 40 years.

The rate for Mexican Federal Treasury Certificates (CETES), the country’s government-insured CDs, are also as strong as ever, around 11.4 percent for a 180-day certificate.

And they are predicted to stay strong for the next year or so.

Foreigners who think in U.S. dollars are complaining how expensive everything is, including their rent, because their dollars purchase fewer pesos every day.

So, it sounds like pesos are the favored currency in Mexico these days.

But what about taking advantage of the inflated-value peso to buy U.S. dollars?

Investments are certainly personal, and I am not an economist.

But if I can buy so many more dollars today at a rate of about 16 or 17 pesos per greenback, something tells me that the mighty U.S. dollar is not going away any time in the near future and maybe I should stock up.

At some point in time, the peso-dollar exchange rate will fluctuate, like it always does.

This may not happen until after the presidential election next July since there are many who believe that the peso is being propped up to support President Andrés Manuel López Obrador’s leftist National Regeneration Movement (Morena) party and provide an electoral boost to its candidate.

Consequently, my thinking is that it makes sense for me to consider buying dollars for things I will purchase in dollars, like U.S. plane tickets, entrance to Disneyland, outside-of-Mexico trips and the like.

Were I to charge something on a U.S.- based credit card, my dollar stash would be my payoff mechanism.

For daily expenses I know I will have in Mexico, for sure I will continue to hedge and invest all expenses in pesos for the next year, if I can.

But for my limited dollar expenses, something tells me to purchase a few bucks each week as I walk past the money exchange house.


Leave a Reply