Mexico’s ‘superpeso’ has not lost steam to date in 2023; the currency has appreciated by 8.5% between January and March, and the spot rate hit 18:1 USD last week, buoyed by the recent announcement of a Tesla investment in the northern state of Nuevo Leon. While we expect that the Mexican peso will gradually weaken throughout 2023, it is likely to remain below the 20:1 USD barrier, with an annual average of 19.4 in 2023.

We expect to see a strong Mexican currency throughout 2023, which will sustain the purchasing power of Mexican consumers and compound the country’s investment attractiveness. Still, you’ll need to monitor global and domestic headwinds, which are likely to impact the trajectory of the MXN and continue to rely on scenario planning as you adjust your pricing strategy for 2023 and 2024.


Since 2019, the Mexican peso has depreciated by only 4.4% against the USD, exhibiting by far the most resilience among the main LATAM currencies. The Peruvian sol, for instance, has been the second most resilient main LATAM currency at 14.7% depreciation, while the Chilean peso has weakened by 25.5% and the Colombian peso by 43.7%.

Most strikingly, however, is that the Mexican peso has not only outperformed at a regional level, but also remains one of the most resilient currencies on the global stage; for context, depreciation since 2019 has stood at 7.9% for the EUR and 20.6% for the Japanese yen.

Our View

While we expect that the Mexican peso will depreciate from Q1 2023 levels, our bias remains to the upside. Not only do we expect a slightly less hawkish Fed than we did in 2022, but we also believe that USD inflows will remain strong overall despite challenging global conditions, particularly amid rising foreign direct investment. Domestic headwinds, however, will continue to create risks to Mexico’s hard-won peso stability. While there is further potential for upside if market sentiment improves as President Andres Manuel Lopez (AMLO)’s presidential term nears its end (particularly if markets expect his successor to be more market friendly), the lead-up to the 2024 elections could be tumultuous and heighten political risk. Other structural country risks like insecurity and democratic erosion (particularly given the upcoming Supreme Court vote on government efforts to shrink the National Electoral Institute) could undermine business confidence, weighing on the MXN.

Read our related article about why the Mexican peso has remained strong.

Download an executive summary of our Mexico Executive Roundtable

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