The US Dollar and Mexican Peso are the two currencies that dominate financial markets in North America. On one hand, the US Dollar is a reserve currency used in global trade by more than 60% of countries in the world. On the other hand, the Mexican Peso is used by more than 90% of Latin American companies. The history behind these currencies begins with the pre-Columbian civilizations of Mexico and Central America.
What is MXN?
The Mexican peso (MXN), the country’s official currency, is abbreviated as MXN. It was based on the Spanish dollar between the 15th and 19th centuries. While MXN is the third most exchanged currency in Latin America behind the US dollar and Canadian dollar, it is by far the most common currency in Latin America.
The spot market for the Mexican peso, in particular, and monetary pairs denominated in USD (USD/USD) and MXN (MXN/USD), attract fewer traders than the main pairs such as yen and euro. Nonetheless, despite its smaller size, the MXN still provides extremely liquid access to growth opportunities in developing economies and Latin America. The Mexican peso has evolved from a single national currency into a strong international financial instrument in recent decades.
Lucas, lana, marimba, money, morlacos, papiros, and varos are some of the names by which it is known. The Bank of Mexico produces the Mexican peso.
The 1000 pesos note is not uncommon, although it does exist! If you come across one, keep in mind that most little shops will refuse to take it since they won’t be able to provide change for it.
The newest banknotes are composed of a plastic composite and are thus extremely difficult to duplicate. Measures were taken to prevent fraud since counterfeit notes were frequently sold to tourists.
Mexican Peso History
The term peso is derived from the Spanish word for pound, which was used to refer to a coin called the Spanish dollar. This eight-coin series was originally known as the “peso” in Latin America, and it is still referred to as such today. The coins were, in fact, Spanish dollars or eight-piece coins that had been in widespread circulation throughout Asia and the Americas until the start of the 19th century, when the Coinage Act went into effect.
The history of money in Mexico dates back to the early 1900s. When the Bank of Mexico was created in 1925, it was given sole authority to issue currency by printing notes and minting metal coins. It also controlled currency circulation, exchange rates, and interest rates.
When Mexico’s government realized that people were using banknotes as currency, they needed to establish a central bank. To accomplish this, the financial agency was granted the authority to operate as a regular credit business in addition to fulfilling its obligations as an issuing bank. Finally, the banknote became the country’s main payment instrument in 1929 and 1930.
The Bank of Mexico’s first MXN notes were printed by the American Bank Note Company (ABNC) in New York. The notes were produced in accordance with the customers’ requirements by ABNC staff. In other words, the Bank of Mexico determined the components and people it wished to portray in each denomination while creating Mexican banknotes. On the other hand, ABNC generated the engravings or the Bank of Mexico chose them directly from among the firm’s records.
Currency Exchange Rate in Mexico
If you look at historical exchange rate charts for the USD to MXN, you’ll notice that the rate has stayed around $20 MXN per $1 USD since 2016. However, it was a lot lower in the past.
The Mexican peso is one of the most constant currencies in North America. Mexico, on the other hand, is seen as an emerging economy and has been impacted significantly in recent years. In 2020, due to COVID’s influence, the currency fell another five points.
In addition, the value of the Mexican peso is influenced by falling oil prices and rising interest rates.
Few Facts of Mexican Peso
First Currency Use $ Symbol
It’s simple to assume the US dollar when you see $. However, it was the Mexican peso that first employed the $ symbol for coins! The $ sign’s namesake comes from the Spanish peso currency in the Americas, which was abbreviated as ‘ps.’
The reason the peso and the dollar use the same sign is because they have a shared heritage.
First Peso Banknotes Printed in US
The Bank of Mexico’s first notes were printed by the American Bank Note Company of New York, also known as ABNC, on a size of 180 x 83 millimeters (mm). This initial run (1925-1934) included banknotes for 5, 10, 20, 50, 100, 500 and 1,000 pesos.
In general, the ABNC’s banknotes were made by its employees based on customer specifications. In other words, in the case of Mexican currency, the Bank of Mexico determined which things and individuals it wished to represent with each denomination, and the ABNC created the images, or else, selected them directly from the business’s archives.
Hard to Make Counterfeit
Banknotes are kept secure using a variety of measures, such as watermarks, micro-prints, and hidden patterns. Every note has a unique watermark that can only be seen when viewed through polarized light, as well as microscopic prints and holographic threads. Furthermore, all notes are produced on different banknote paper. This has the same feel or texture as USD or CAD, and is different from the $20 and $50 peso notes, which are printed on normal banknote paper.