Mexican peso hits record low for third time in 2017

By Nancy Caouette

MEXICO CITY (AA) – The peso plummeted Tuesday to a new record low as concerns mount about the possible effects the policies of U.S. President-elect Donald Trump might have on Mexico.

The county’s central bank reported that the peso dipped more than 1.6 percent to 21.73 per dollar, marking already the third record low for the year.

At one bank in Mexico City the dollar was sold at 22 pesos, an increase of $0.35 from the previous day.

Jose Angel Gurria, the secretary general for the Organization for Economic Co-operation and Development (OCDE) said the depreciation is “almost inevitable” as long as uncertainty remains about Trump’s polices.

He said the central bank’s decisions to raise interest rates five times in 2016 and to sell $2 billion in reserves last week helped contain the fall of the Mexican currency.

"The actions of Mexico has been responsible and responsive," he said at a news conference.

“Central banks around the world can't change a trend, but they can accompany it to avoid disorders or excessive speculation,” he added.

The Mexican economy and auto workers have taken major blows since the beginning of the new year as Trump threatened U.S. automakers with higher taxes on vehicles produced in Mexico.

Ford announced last week it would cancel construction of a $ 1.6 billion plant in Mexico and instead invest millions in the U.S. Earlier this week, Fiat Chrysler said it might follow Ford’s lead and close its Mexican plants if Trump imposes tariffs on vehicles made in Mexico.