A poll conducted amongst 30 economists by the Mexican Institute of Financial Executives (IMEF) speculates an average exchange rate of 18 pesos per dollar by the end of 2017 and 18.90 by the end of this year.
“This assumption can only be calculated under the premise of Clinton victory, because the other scenario we dare not even attempt to calculate“, said Joaquín Gándara, president of the IMEF, at a press conference. Trump, currently trailing Clinton in the polls, has been aggressive in his posture on Mexico, promising to build a border wall, massive deportations of illegal immigrant and an overhaul of the NAFTA agreement.
The Mexican peso has been one of the worst hit emerging market currencies falling sharply against the dollar by more than 8.0 per cent so far this year and by 16.84 per cent last year. Economists attribute the possibility of Trump winning as one of the major reasons for the decline this year, coupled with uncertainty over future US monetary policy and price volatility for crude oil.
This week Mexico’s central bank governor Agustin Carstens explained that volatility in local markets could ease if the situation involving U.S. Republican Presidential hopeful Donald Trump “resolves itself.”
Noting that Trump has made “very specific” comments about Mexico, Carstens told local radio that “everything points to this resolving itself and let’s hope that is the case. And from then on, I expect that we could see much less volatility in our markets.“