Jaltemba Sol
Rising peso perplexes Mexicans
The plunging U.S. dollar has already forced many Americans
to give up vacations in Europe. Now, the dollar has lost nearly 10 percent
against the Mexican peso since January -- meaning that beach trips to sunny
spots south of the border are becoming out of reach, too.
The dollar's value had been stable for years in Mexico, even
as it fell against other currencies such as the euro. The shift could have a
significant effect on tourism and the $347 billion in trade between Mexico and
the United States.
Ronald Scott Braithwaite of New Haven, Conn., is one of many
American tourists who have embraced Mexico as one of the last remaining bargain
destinations abroad. "Maybe if the dollar keeps going down, we won't be able to
come here either," he said as he and his wife visited Mexico City's Metropolitan
Cathedral.
Thousands of American retirees accustomed to the good life
in Mexico have seen their rents and other expenses go up. "You can see the
difference when you go out and buy dinner," said Margie Harrell, a Palm Springs,
Calif., retiree who resides on glimmering Lake Chapala.
Last week, the dollar traded at its lowest level against the
peso in six years.
Mexico City is nearly as expensive for foreigners as
Washington, according to a study released in July by Mercer, a U.S. consulting
firm that studies the cost of living in cities around the world. Mexico's
inflation rate of 5 percent is also about a percentage point higher than in the
U.S.
The sagging exchange rate could also mean higher prices in
American stores for a wide range of Mexican products from lettuce to mobile
phones. In the case of fresh produce, the effect could be seen beginning next
year, said Jesse Driskill, president of the Fresh Produce Association of the
Americas. "As the peso strengthens, it increases the cost of the product in
Mexico," he said. "Eventually, you're going to have higher food prices because
of that."
The rising peso could threaten assembly plants, known as
"maquiladoras", that export to the USA, said Jorge Pedroza Serrano, president of
the "maquiladora" group in Chihuahua state.
"It does hurt our competitiveness, because it makes our
operations more expensive," Pedroza said. "We're all asking ourselves how long
the peso is going to keep this up."
The dollar's slump also means migrants in the U.S can send
less money home. The average wire transfer of $350 yielded 369 pesos less than
it would have in January -- enough to buy 9 gallons of milk or 30 pounds of
chicken.