Peso Exchange Rate Could Exceed 24 Units per Dollar Amid U.S. Tariff Threats, BBVA Warns

Puerto Vallarta, Mexico – In a concerning development for the Mexican economy, BBVA analysts warn that the peso could depreciate to over 24 units per dollar in the short term if the United States maintains its proposed 25% tariffs on Mexican goods. This scenario would mark a significant drop from the closing exchange rate of 20.6871 pesos per dollar recorded on January 31.

The estimated depreciation of 3.31 pesos would heighten economic tensions between the two neighboring countries, further exacerbating trade-related uncertainties.

Potential for Recovery by Year-End

Despite the grim short-term outlook, BBVA projects a potential correction to 23 pesos per dollar by the end of the year. This optimistic scenario hinges on a favorable resolution to the ongoing trade policy issues between Mexico and the United States.

The Bank of Mexico (Banxico) is anticipated to adopt a cautious, wait-and-see approach before considering interest rate cuts, which analysts expect could resume by the end of the third quarter.

Economic Implications of Peso Depreciation

BBVA analysts highlighted that while the peso’s depreciation may lead to inflationary pressures, weaker domestic demand is likely to mitigate part of this impact. This economic environment could provide Banxico with the flexibility to reduce interest rates despite sluggish growth.

“If, after these threats of 25% tariffs, only a 10% tariff is imposed, as suggested during the campaign, we estimate there would be no significant effect on the exchange rate compared to the January 31 closing level,” BBVA stated.

Tariff Avoidance Could Strengthen the Peso

Should Mexico manage to avert new tariffs entirely, the peso could appreciate to approximately 19.5 units per dollar. In this case, Banxico could be prompted to raise the monetary policy rate to 7.5% by the end of the year.

This development underscores the significant influence of international trade relations on Mexico’s economic stability. Businesses and consumers alike are advised to monitor the evolving trade policies closely as they may directly impact inflation, investment, and overall economic growth.

As trade negotiations continue, the peso’s future remains uncertain. Both BBVA and Banxico’s outlooks suggest that while challenges loom, potential recovery is plausible, contingent upon Mexico’s ability to navigate the tariff threats and maintain stable trade relations with the United States.

Puerto Vallarta, Mexico - In a concerning development for the Mexican economy, BBVA analysts warn that the peso could depreciate to over 24 units per dollar in the short term if the United States maintains its proposed 25% tariffs on Mexican goods. This scenario would mark a significant drop from the closing exchange rate of 20.6871 pesos per dollar recorded on January 31.

Follow Us On Google News | Get Our Newsletter



Trending News on PVDN

  • puerto-vallarta-rainfall-hurricane-flossie-july-2025Puerto Vallarta braces for torrential rains as Hurricane Flossie gains strength Puerto Vallarta faces a high risk of flooding as Hurricane Flossie intensifies in the Pacific. Torrential rains and overwhelmed drainage systems pose major challenges for the city. Puerto Vallarta, a city wedged between the Sierra Madre mountains and the Pacific Ocean, is no stranger to dramatic weather shifts—but this summer, the skies are testing the…
  • raw-sewage-playa-los-muertos-puerto-vallartaMore Raw Sewage Dumping at Playa Los Muertos Appear to Come From Local Hotel Business owners in Puerto Vallarta are demanding action after raw sewage was discovered leaking onto Playa Los Muertos, raising public health and tourism concerns. A raw sewage leak at Playa Los Muertos in Puerto Vallarta has sparked outrage among local tourist service providers and business owners, who say the contamination is driving away visitors and…
  • hurricane-flossie-strengthens-july-1-2025Hurricane Flossie will bring tropical storm conditions to parts of Guerrero, Michoacán, Colima, and Jalisco Hurricane Flossie intensifies off Mexico's Pacific coast with winds near 90 mph. Heavy rain, flooding, and tropical storm conditions expected in parts of Guerrero, Michoacán, Colima, and Jalisco. Hurricane Flossie continued to intensify early Tuesday morning as it moved west-northwestward off the coast of southwestern Mexico, prompting tropical storm warnings and watches across multiple states.…
  • Where do foreigners come from and where do they live in MexicoMexico City Protest on July 5 Challenges Gentrification and Airbnb’s Impact on Housing Residents of Roma and Condesa will gather at Parque México on July 5 to protest gentrification, rising rents, and Airbnb’s effect on local housing. This Saturday, July 5, Mexico City will witness its first organized citizen protest against gentrification—a peaceful but urgent gathering taking place at 3:30 p.m. at the Lindbergh Forum in Parque México,…
  • cabo-corrientes-warning-canceled-hurricane-flossieCabo Corrientes Spared as Hurricane Flossie Warning Lifted, But Pacific Coast Still at Risk Cabo Corrientes no longer under tropical storm watch as Hurricane Flossie nears Mexico's Pacific coast, with dangerous winds and heavy rains threatening Michoacán, Colima, and Jalisco. The tropical storm watch for Cabo Corrientes was officially canceled Tuesday, offering a measure of relief for the scenic coastal town as Hurricane Flossie continues to churn off Mexico’s…
  • no-damage-jalisco-hurricane-flossieNo Damage Reported in Jalisco as Hurricane Flossie Moves Away While Mexico's Weather Service predicted heavy rains, Hurricane Flossie causes no damage along Jalisco’s coast. The Category 3 storm brings light rain and moderate waves as it moves away from the region. The coasts of Jalisco remain calm and largely unaffected following the passage of Hurricane Flossie, a powerful Category 3 storm that is now…
  • cancun-2025-sargassum-beaches-and-activitiesSargassum won’t ruin your Cancun vacation, there are plenty of clean beaches and tourist activities As the 2025 sargassum season continues through September, visitors to Cancun can still enjoy clear beaches like Playa Delfines and Playa Caracol. As the 2025 sargassum season intensifies across Quintana Roo, tourists are finding it more difficult to enjoy the region’s iconic white-sand beaches without encountering the unsightly brown seaweed. While the influx of sargassum…
  • tropical-storm-flossie-hurricane-mexico-pacific-coastTropical Storm Flossie to Strengthen into Hurricane as It Tracks Along Mexico’s Pacific Coast Tropical Storm Flossie is expected to become a Category 2 hurricane by July 2 as it moves parallel to Mexico’s Pacific coast, bringing dangerous rainfall, wind, and surf. Tropical Storm Flossie is on the verge of forming from Tropical Depression Six-E and is forecast to strengthen rapidly into a hurricane as it parallels Mexico’s southwestern…
  • oregon-murder-fugitive-extradited-puerto-vallartaFugitive Wanted for 2008 Oregon Homicide Captured in Puerto Vallarta and Extradited to U.S. Jesús Rodríguez Borrayo, a fugitive for 17 years, was extradited from Mexico to Oregon for his role in a 2008 drive-by shooting that left one dead. He was located in Puerto Vallarta. A man wanted for murder and other violent crimes in the United States for nearly two decades has been extradited after being found…
  • tropical-wave-7-floods-bacalar-chetumal-emergency-responseTropical Wave Floods Bacalar and Chetumal as Navy and Army Activate Emergency Plans Torrential rains from Tropical Wave 7 flood Bacalar and Chetumal, prompting emergency response from the Navy and Army. Several towns remain isolated in southern Quintana Roo. Torrential rains caused by Tropical Wave Number 7 have flooded multiple communities in southern Quintana Roo, prompting a joint emergency response from Mexico’s Navy and Army. Authorities activated their…
Scroll to Top