Mexican Peso

• Country: Mexico
• Currency: Peso
• Alias: Mexican peso
• ISO 4217 CODES: MXN/484
• Symbol: Mex$

The peso is the national currency of the United Mexican States – also known as Mexico – a North American union of 31 states and a federal district hosting the national capital of Mexico City. Mexico was a former colony of Spain, and the peso was modeled after the Spanish silver dollar. While the Mexican economy has gone through several inflationary phases and currency devaluations in the 20th century, the peso remains fairly stable and has earned a coveted place as one of the 15 most commonly traded currencies on the global foreign exchange market.

Background of the Mexican Peso

The Mexican peso was modeled after the Spanish silver dollar. The original peso coin minted to coincide with Mexico’s independence in 1823 was made from very pure silver (.903 fine). The value of the peso coin could not keep up with the value of silver contained in it, and as a result, the percentage of silver was gradually dropped over the years. The last peso coin containing silver was minted in 1957 (.100 silver). The current peso coin is minted from a copper-nickel alloy.

Following several years of inflation and devaluation, a new currency – the nuevo peso, or “new peso” – was introduced in 1993. The “new” portion of the nomenclature was dropped within three years.

The Mexican peso was devalued in 1994, resulting in widespread recession. In the same year, the signing of the North American Free Trade Agreement (NAFTA) between Canada, the United States and Mexico marked the beginning of a significant boost in Mexico’s exports. Mexico is currently contemplating participation in the “Free Trade Area of the Americas,” a proposed accord between North, Central and South American countries first designed in 1995.

Economists have speculated that remittances in U.S. dollars made by from Mexicans living in the United States currently represent Mexico’s second largest source of income, surpassed only by oil revenues.

The peso is divided in 100 centavos. Denominations for coins are 10¢, 20¢, 50¢, $1, $5, $10 and $20. Denominations for banknotes are $20, $50, $100, $200, $500 and $1,000.