Mexican Peso in free-fall as Trump Wins
Donald Trump's victory in Tuesday’s U.S. presidential election drove the Mexican peso down to a record low against the dollar.
The Mexican currency was trading at 20.70 to the greenback, Citibanamex said on its Web site, down 11 percent from Tuesday’s close.
The peso’s dive began after the results from the key swing state of Florida began trending in favor of Trump in his race against Democrat Hillary Clinton.
The value of the peso has fluctuated with the U.S. electoral polls in recent months as a result of Trump’s promises to build a wall on the U.S.-Mexico border and to renegotiate – if not scrap – the North American Free Trade Agreement.
In comments Tuesday night to Televisa television, analyst Luis de la Calle spoke of predictions that the peso could fall to 23 to the dollar if Trump wins the White House.
But when asked about the potential effects of a Trump presidency on the Mexican economy, De la Calle said that a crisis is not inevitable.
What Mexico cannot avoid, he said, is a “period of uncertainty.”
The Mexican government has taken steps to cushion the economy from any turbulence arising from a Trump win, Finance Secretary Jose Antonio Meade said last Friday.
Those steps include drafting a 2017 budget “that brings us back to a primary surplus,” putting aside funds to meet all sovereign debt obligations that come due during the first five months of next year, and presenting a new business plan for state oil company Pemex, Meade told Radio Formula.
“All this allows that this volatility we are already seeing does not affect any real (economic) variable,” he said.
“We are calm,” Meade said, adding that should Trump win, the Mexican government will closely monitor the reactions in financial markets.
“We are alert and we have instruments to react according to what we are seeing,” he said, downplaying the likelihood of any dramatic announcements in Mexico on the day after the U.S. election.