The Mexican peso weakened by nearly 23% this year, closing the final trading day at 20.82 pesos per U.S. dollar on Tuesday. This marks the currency’s sharpest annual decline against the dollar since the 2008 global financial crisis.
The peso experienced a turbulent year, starting with steady gains that lasted through the first half of the year. However, its fortunes shifted after June’s general election, which resulted in a sweeping victory for the leftist Morena-led coalition in the presidential race and a strong congressional majority.
In April, ahead of the election, the peso traded at approximately 16.26 per dollar, reaching a nine-year high. However, Morena’s electoral success set the stage for constitutional reforms in September, including a controversial overhaul of the judiciary that critics argue could undermine judicial independence in Latin America’s second-largest economy.
The peso’s struggles were further compounded by the November election of U.S. President-elect Donald Trump, whose renewed threats of tariffs against Mexico added to the currency’s volatility. Mexico sends about 80% of its exports to the United States, making its economy highly sensitive to U.S. trade policies.
Additionally, Mexico’s main stock index faced a challenging year, falling nearly 14% to close at 49,513 points on Tuesday, marking its largest annual decline since 2018.
