Successive Mexican presidents-Jose Lopez Portillo and Miguel de la? Miguel de la Madrid and Carlos? Carlos salinas, a member of the Revolutionary Institutional Party, established the image of "new" Mexico from 1976 to 1994. With the conclusion of the North American Free Trade Agreement (NAFTA) between the United States, Mexico and Canada, and its entry into force on 1994 65438+ 10/0, Mexico's prospects are more optimistic.
1994,65438+February, the Mexican peso was suddenly subjected to huge selling pressure. A few days later, the exchange rate of peso against the dollar fell to less than half of its previous level. Followed by a large-scale macroeconomic contraction, bankruptcy spread like wildfire, and the Mexican people began to experience great economic pain.
What happened to Mexico? Francisco? Hill? Diaz and Augst? Caster, two economists at the Bank of Mexico, studied the crisis. He said, "We found clear evidence that Mexico experienced a speculative attack caused by politics, not a crisis based on real economic chaos."
However, there are different views on basic economic analysis. In the following analysis, we will see that the devaluation of the peso actually stems from the real economic impact. Correct after-the-fact analysis must start with Mexico's fixed exchange rate system.
Mexico's "crawling peg" exchange rate system operates as follows. From1991111,the Mexican central bank fixed the value of the peso against the US dollar within the scope of official intervention. What is the upper limit of peso against the dollar? 0520。 The lower limit is extended by 0.0002 pesos per day, which means that the peso is allowed to depreciate gradually in theory. The daily change of the lowest price increased to 0.0004 pesos per day in June1992+1October 2/kloc-0.
Despite the peso stabilization plan (requiring the government to buy pesos at any time at the pegged exchange rate), there is a huge difference between Mexican interest rates and American interest rates. 1994 1 month, the difference between the annual interest rate of Cetes and the comparable annual interest rate of USD is 6.22%. Cetes is a short-term treasury bill issued by the Mexican government and priced in pesos. By July, the difference between Cetes interest rate and comparable dollar interest rate had risen to 9.94%. Before the crisis, 65438+early February, the difference was about 7%.
However, as long as foreign investors think that Mexico's fixed exchange rate system can be maintained, they will have a strong incentive to hold pesos. The lowest price of peso is allowed to drop at a rate of only 0.0004 pesos per day, that is, the theoretical maximum annual depreciation rate is 4.8% of the currency.
In the early 1990s, capital poured into Mexico on a large scale. According to the estimation of the International Monetary Fund, during the period of 1990~ 1993, Mexico absorbed 9 1 billion dollars of foreign investment, reaching 30 billion dollars in just one year. Considering Mexico's huge economic prosperity, the risk of peso devaluation seems remote. However, in fact, Mexico is creating a first-class "peso problem" for itself.
Surprisingly, after the crisis, foreign investors did not realize that a large amount of capital flowing into Mexico might one day flow out, plunging Mexico into chaos. People are complacent that Mexico's current account deficit has steadily increased from $3.8 billion in 1988 to $29.5 billion.