Description

The Mexican peso (MXN) is the official currency of Mexico. It is subdivided into 100 centavos. The currency was initially based on Spain’s official currency, called ‘real’, which was the Spanish dollar. The Mexican peso’s name originated from the silver 8-real coins issued by Spain in Mexico.

Economy

• The Mexican economy is supported by increasing private ownership.
• The country’s economy is based on the service sector, accounting for 64.5 percent of GDP.
• The Mexican economy underwent a deep transformation in the 1980s, leading to the signing of the North American Free Trade Agreement (NAFTA) in 1992.
• Oil exports, including mineral fuels, account for 4 percent of the entire country’s exports.

History

• In 1785, the US dollar was set at a rate comparable to the peso, which was widely used as an official currency in the US until 1857.
• After gaining independence from Spain in 1821, Mexico continued to use the peso as its currency.
• In 1863, the first centavo coins were issued at one-hundredth of the peso.
• In 1905, the value of the golden peso was reduced by 49.3 percent, but the silver peso remained unchanged.
• After the oil crisis in 1979, Mexico experienced many years of inflation and debt defaults, leading to the replacement of the currency with the ‘nuevo peso’, also called ‘new peso’ - MXN. The new peso was valued at 1000 of the previous Mexican peso, MXP.