Factors influencing the exchange rate in Mexico: Mexican peso – US dollar ratio
DOI:
https://doi.org/10.36881/ri.v8i2.958Keywords:
Exchange rate, Mexican peso, volatility, currency forecast, ordinary least squaresAbstract
The main of this paper is to describe the behavior of the Mexican peso-US dollar exchange rate in the period 2003-2023. The methodological approach is based on the ordinary least squares (OLS) technique to determine the degree of influence of economic variables on the exchange rate. The results indicate that the level of exports from Mexico and the United States, the Mexican trade balance and US imports cause the exchange rate to appreciate. In contrast, Mexico's inflation, rising Mexican and US debt, and Mexican imports cause a depreciation of the Mexican peso. The evolution of the exchange rate shows an upward trend throughout the 20 years of study that has been characterized by very marked stages of volatility, so it is necessary to design monetary policies that reduce the impact from abroad and promote the strengthening of the Mexican coin.
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