MXN – Mexican Peso
Mexican Peso is the official currency of Mexico, and is only found there. A little known and curious fact about the Mexican Peso is that although there is a tendency to assume that it was the US Dollar that first gave the world the “$” symbol, the Mexican Peso had already beaten it to the mark and so it was the Mexican Peso that had widely used the symbol first. The literal English translation of the word “peso” is “weight” and this is a reference to the fact that the Mexican currency was based on gold and silver and so different weights of these metals would determine the amount required to settle a transaction.
Given that Mexico was a Spanish colony, it is perhaps not surprising then that Spain played a very prominent role indeed in the development of the currency system within the country. Indeed, the peso was originally used in reference to the Spanish silver dollars that were circulated throughout the land, and even after Mexico had acquired its independence in 1821, the government still continued to rely upon and draw inspiration from the Spanish currency model.
The innovation that the newly established and elected Mexican government did was to ensure that the Mexican Peso would no longer be exclusively available by means of coinage and so this effect, the government implemented a significant investment in the development of paper banknote production.
Towards the beginning of the 20th century, the Mexican government had significantly reduced the gold content of the coinage, in an attempt to ensure that the precious metal could be better employed elsewhere such as export and industrial purposes.
Since its independence was granted in 1821, Mexico was widely regarded in high esteem as well as no small measure of envy by its fellow Latin American neighbouring countries and the reason for this was due to the fact that the Mexican economy was fairly stable. Other Latin nations including Brazil and Chile had experienced prolonged and difficult periods of hyperinflation and so they struggled to cope with this effectively.
However, the golden era of economic prosperity and stability was to come to a crashing and sudden halt for Mexico as the Oil Crisis of 1970 took place. One of the major consequences of this crisis was that the Mexican government was no longer able or even capable of actually settling its debts and so the end result was that they defaulted. As such, this meant that economic sanctions were imposed and there was a major withdrawal of capital from the nation.
In an attempt to finally seize some much needed and frankly, overdue control over the economy, in 1993 the government introduced the Nuevo Peso which was valued at a rate of 1 NP for 1000 Mexican Pesos.
However, in 1995, with the now obsolete Mexican pesos duly removed, the next step was for the government to then drop the Nuevo part of the Nuevo Peso and adopt it as the new currency which it did.
One of the lowest ebbs of the Mexican Peso occurred in November of 2009, when the exchange rate between Mexican Peso and US Dollar reached 8.2746 MXN to 1 US Dollar. This represented a major shift from the previous month of October, when the rate had stood at 13.4992 per 1 US Dollar.
The Mexican government has been careful to encourage and cultivate foreign investment opportunities and this has resulted in significant amounts of capital entering into the country and this has in turn, helped to keep the economy stable and afloat. By virtue of this, the confidence in the Mexican Peso as a reserve currency has grown quite considerably.
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