The Real Deal With the Dollar/Peso Exchange Rate

A Mexican peso coin from 1982.With the Mexican peso over 15 to 1, the U.S. dollar purchases 18% more pesos today than it did a year and a half ago. In theory, this means a person should be able to purchase 18% more today than they did back then.

In the sixties and the seventies that would have been true, but not today. Today merchants and hotel owners have cellular phones with WiFi access, and in a matter of minutes they can access the official exchange rate. So along with the peso, hotel rates have crept up, bit by bit, and the price today is usually the same in dollars as it was two years ago.

In grocery stores now, many prices are adjusted daily. In addition, most of Mexico’s groceries today are imported from the US, particularly in Baja.  Even a sizable percentage of beans and cornmeal are imported from the US.

The manager of a very large supermarket sadly informed me last week, “I truly apologize, but you see the price of genuine butter has risen in price so much that no one will buy it now.” Fewer jars of Best Foods mayonnaise are on the shelves now and liter jars have been replaced by micro size jars.

Forget imagined “savings” when buying gasoline. $3.50 per gallon gasoline isn’t a bargain in anyone’s budget.

Some basic foodstuffs prices have lagged behind others. Fresh fruits and veggies are still a bargain. But unless you sticks to tortillas, beans and fruit and veggies, a trip to the store isn’t going to have you squealing with financial delight. But at least you’re getting more pesos for dollar.

Workers on the other hand haven’t had wages increased to cover rising prices. They’ve had to revert back to basic food items, with less travel and fewer non-essential purchases. Stores endure this squeeze and, to put it bluntly, kiss off the English Muffins, peanut butter, pickles, fancy whole bean coffee and cottage cheese.

Recently as I was rising from breakfast I reached into my pocket and extracted a coin then worth one dollar. A great tip! I thought.

Then it hit me. Great Tip My Ass! Gee just think a whole quart of gasoline for the family car! Less than a Kg of tortillas for a hungry family.

I reached deeper.

One Response to “The Real Deal With the Dollar/Peso Exchange Rate”

Read below or add a comment...

  1. -EL CODO- says:

    ATM fees can add up fast. Four extractions at a local BanComer ATM would cost me 81 pesos per extraction and my bank charges five dollars if I do not use one of their ATMs. At a 15-pesos per dollar exchange rate the 81-pesos is the same as five dollars forty cents US. Ten dollars forty cents per ATM use. Forty one dollars sixty cents for four extractions