Currencies by Country:

What is the Mexican peso (MXN)?

Credit Ratings & Outlook

In the latest credit ratings from December 1970, Moody's gives Mexico a Baa1 rating, with a stable outlook. Fitch has a stable outlook with a BBB rating. Finally, S&P last issued a BBB rating, with a stable outlook.

Sovereign credit ratings play an important part in determining a country’s access to international capital markets, and the terms of that access. Sovereign ratings help to foster dramatic growth, stability, and efficiency of international and domestic markets.

Central Bank Rate

The current central bank interest rate is 4.50%. This is the same as 2011, which was 4.50%.

GDP

In 2010 the total GDP was $1,035,870,880,242 in US Dollars, while the per capita GDP was $9,132. It grew by 5.52% over the previous year.

Unemployment

The latest unemployment rate for 2010 is 5.30%.

Consumer Price Index

The latest consumer price index for 2010 is 124.22.

Political Structure

The current head of the government is President Felipe Calderón, who is also the head of state (in an executive role).

Currency Details

The Mexican peso, MXN, was originally based on the silver dollar of Imperial Spain. It was originally minted from pure silver and was the first currency to use a distinct border and exact weight to protect from counterfeits, making it very popular. On July 6, 1785 the peso became the official currency system for all of North America, including the United States. When the U.S. dollar was introduced on April 2, 1792, it was based on the peso with the exchange rate of 1 dollar to 1 peso. The peso continued to be officially accepted in the U.S. until 1857, and in Canada until 1858. The peso was a very stable currency experiencing very little inflation until the 1970s when Mexico experienced an oil crisis and was forced to default on its external debt in 1982. Several years of inflation and devaluation followed until 1993 when Mexico issued the Nuevo peso to replace the former peso. In 1993 the “Nuevo” was dropped from both the name and the notes and the peso is again the currency used in Mexico today.

Moody’s Rating
Baa1, 06 Jan 2005
S&P Rating
A

Sovereign credit ratings play an important part in determining a country’s access to international capital markets, and the terms of that access. Sovereign ratings help to foster dramatic growth, stability, and efficiency of international and domestic markets.

What does it look like?

Political Structure

The United Mexican States are divided into 31 states and one federal district. The government is presidential with a strong Congress. The President is elected to a six-year term and may not run for re-election when his term expires. The Congress is bicameral consisting of a 128-member Senate and a 500-member Chamber of Deputies. There is a federal Supreme Court but it is not viewed as a separate branch of the government.

Prominent Figures

Chief of State President Felipe de Jesus CALDERON Hinojosa (since 1 December 2006); note – the president is both the chief of state and head of government
Head of Government President Felipe de Jesus CALDERON Hinojosa (since 1 December 2006)
Cabinet Cabinet appointed by the president; note – appointment of attorney general requires consent of the Senate
Elections president elected by popular vote for a single six-year term; election last held on 2 July 2006 (next to be held 1 July 2012)
Election Results Felipe CALDERON elected president; percent of vote – Felipe CALDERON 35.89%, Andres Manuel LOPEZ OBRADOR 35.31%, Roberto MADRAZO 22.26%, other 6.54%

Key Economic Factors

According to the World Bank, Mexico has the highest per capita income in Latin America. The Mexican economy relies highly on the private sector, as there are only about 200 state-owned enterprises, down from over 1000 in the 1980s. Although the economy struggled in the mid-1990s, a strong export sector helped to revive the state of the economy and the currency in the late 1990s and into the 21st century. Mexico still needs to overcome many structural problems as it strives to modernize its economy and raise living standards. Income distribution is very unequal, with the top 20% of income earners accounting for 55% of income. The Mexican economy has undergone a profound transformation since the 1980s as a result of economic liberalization and joining the North American Free-Trade Agreement (NAFTA, a free-trade bloc with the US and Canada). Having relied heavily on oil for foreign-exchange earnings in the late 1970s, manufacturing quickly became the main source of export earnings. In 2003 the sector accounted for around 20% of GDP and around 85% of export earnings, according to preliminary estimates. Almost half of total exports were produced in maquiladoras (in-bond assembly for re-export plants). Services, however, are the most important contributor to national output. During the first three quarters of 2003 the sector accounted for 66.6% of GDP.

Agriculture has declined in importance, economically (it accounted for just 4% of GDP in 2003) but remains an important source of employment (around one-fifth of the workforce is involved in agricultural activities). Mining is estimated at just 1.4% of GDP in 2003 but this heavily understates the importance of oil production to the economy and, particularly, to the Treasury. Oil exports represented 11.3% of total export earnings in 2003.

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