Mexican peso

The Mexican peso is the official currency used in Mexico. It is a vital part of the global economy. Today, it is the most traded currency in Latin America. It also ranks as the third most traded currency in the Americas. The peso uses the symbol "$" and the ISO 4217 code MXN. The "N" in that code stands for the "new peso."

One peso is divided into 100 smaller units called centavos. These are represented by the symbol "¢." The Bank of Mexico is the institution responsible for issuing banknotes. These notes feature vibrant colors and imagery. These designs represent Mexican culture and history.

The history of the peso began with silver and gold. In the 16th to 19th centuries, Spanish silver reales were used for trade. Eight-real coins were often called pesos in Spanish America. These coins were minted from silver mines in Mexico and Bolivia. They were exported to Europe and Asia as a global reserve currency. They even served as models for the U.S. dollar and the Chinese yuan.

Mexican silver pesos with a "cap-and-ray" design were legal tender in the United States until 1857. They remained legal tender in China until 1935. The first Mexican mint for pesos was established in 1535. However, the modern peso system began in 1863. This happened under Emperor Maximilian during the Second Mexican Empire. He introduced the division of the peso into 100 centavos.

Currency values often change due to economic shifts. In 1905, the peso was defined as 0.75 grams of fine gold. By 1900, one gold peso was worth two silver pesos. Later, the weight of silver coins declined steadily. From 1918 to 1979, the fineness of silver coins dropped. The last silver 100-peso coins were minted in 1979. Between 1954 and 1976, the U.S. dollar was worth 12.50 pesos.

Mexico faced severe economic challenges in the late 20th century. In 1982, Mexico defaulted on its external debt. This caused a massive devaluation of the peso. The dollar rose from 23 to 150 pesos in a single year. This created high unemployment and economic hardship. To fix this, President Carlos Salinas adopted the "Stability and Economic Growth Pact." This helped the economy stabilize in the early 1990s.

A major change occurred on January 1, 1993. The Bank of Mexico introduced the "new peso," or MXN. One new peso was equal to 1,000 old pesos. The old code was MXP. The government issued Series B banknotes to make the transition easy. These notes had the same designs as the old ones. For example, an old MXP$20,000 note became a new MXN$20 note.

In 1994, a significant crisis hit the new peso. This happened around the time of the NAFTA agreement. Several unexpected shocks occurred, including the assassination of Luis Donaldo Colosio. This caused investors to withdraw money from the country. The peso lost 82.9% of its value against the U.S. dollar. This led to a recession where the GNP fell by 9.2% in 1995.

The 1994 crisis forced many families to adjust. As unemployment rose in urban areas, many women and teenagers entered the workforce. This helped prevent the total collapse of household living standards. By 1996, the name "nuevo peso" was dropped. The currency was simply called the "peso" again. Today, the MXN code remains the standard for the nation's money.