The Mexican peso has been on a winning streak, outperforming major currencies and earning the nickname ‘super peso.’ With an appreciation of 26% since the end of 2016, the peso has seen significant gains in recent years. However, concerns about a potential interest rate cut by the Bank of Mexico in March have some experts predicting a less optimistic outlook for the currency in 2024.
According to Citibanamex, the Mexican peso could reach 18.58 pesos per dollar by the end of 2024, citing factors such as a decrease in the rate differential with the United States, a potential slowdown in remittance income, a moderation in nearshoring enthusiasm, and an overvaluation of the real exchange rate compared to its long-term average.
While the peso has been performing well in recent years, the potential for a shift in monetary policy could impact its future trajectory. Investors and analysts will be closely watching the Bank of Mexico’s decision on interest rates in March to gauge the peso’s response and potential outlook going forward.