Soaring peso inconvenient to some but a quadruple whammy for economy

...On or about April 1, 2020, generally reckoned as the start date for the pandemic, the interbank dollar exchange rate stood at just under 24:1, having flirted with the round number of 25:1 only a few weeks earlier. As this is written the rate has dropped to less than 20...Mike, Sally and Harry are annoyed, even inconvenienced by the 20% erosion in the value of their dollars. But the recipients of remittances from sacrificing Mexicans working in the U.S., Canada and Europe may be devastated by the roughly four-peso-per-dollar plunge in the purchasing power of the money sent back home. It’s a triple or even quadruple whammy to an economy already struggling with loss of employment, a disappeared tourism sector, and low oil prices...To reduce the situation to Exchange Rates for Dummies: a higher value for a country’s currency stimulates imports, penalizes exporters, hastens capital outflows, and with an expected $36 billion a year in remittances, a four-peso difference puts billions of kilos’ worth of fewer tortillas on the tables of Mexico’s hungriest...MORE