February 2002
Potent peso is put through its paces
MEXICO
Not long ago, it looked as if the Mexican peso was becoming
the new Swiss franc. Backed by huge capital inflows and underpinned
by a fast-growing economy, the currency could do no wrong.
In 2001, the peso was one of just five currencies in the world to
appreciate against the US dollar, outperforming in this race
upwards the Czech koruna, Polish zloty, Hungarian forint and
Peruvian new sol. At the year-end, the Mexican currency had become
the strongest in the world, making a total gain of almost 6%
against the dollar.
Even by the middle of last year, no-one could quite believe it.
"The peso outperformed all our expectations," says Douglas Muzyka,
president and general manager of the DuPont chemical company's
operations in Mexico. "We were waiting for it to fall in value, and
it appreciated."
This year it is expected to lose value, depreciating to...
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