The Mexican peso has hit its lowest level ever against the dollar Wednesday, trading an average of 16.52 on the interbank market, the Bank of Mexico said.
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The decline, the latest in a string of new lows this year, is due to pressure from falling oil prices and an anticipated interest rate hike in the U.S., MetAnalisis consultant Gerardo Copca told The Associated Press. He said it also was influenced by the poor performance of China’s economy, which puts pressure on the exchange market.
The peso has seen a big fall this year despite efforts by the Central Bank to prop it up by auctioning dollars on the exchange market. The bank auctioned $233 million Wednesday, but it did not stop the currency from hitting the new low.
MetAnalisis statistics say the peso has depreciated 12 percent in 2015.
Copca said a rise in U.S. interest rates creates a demand for dollars in the Mexican market to be shipped north, strengthening the price against the local currency. He said it’s difficult to predict, but the peso “could continue to depreciate.”
Bank of Mexico Gov. Agustin Carstens, in a column in the newspaper Reforma on Sunday, said the causes for the record drop are global and external to Mexico, with the dollar strengthening against currencies in both advanced and emerging countries.
“Our country is not among those hardest hit,” he said, adding that despite the currency devaluation, Mexico is seeing low inflation and interest rates. He said the drop will be offset by financial stability and steady economic growth.