Mexican peso

The peso is the currency of Mexico. It is divided into 100 centavos. The symbol used for the peso is "$", while centavos are represented by "¢". Its current ISO 4217 code is MXN (prior to 1993 the code "MXP" was used).

History

The peso was originally based on imperial Spain's silver dollars, the renowned pieces of eight of pirate literature and Hollywood swashbucklers.

The name peso means weight, and this is a reference to the principal characteristic of the coin. The silver mines of Mexico supply ample sources of pure silver and, more importantly, the peso was the first coin to have a border that made it easy to detect if the coin had been tampered with. It was a common practice to cut or wear down the edges of gold and silver coins, thus obtaining raw precious metal. Since the peso was a coin of pure silver with an exact weight, it became very popular, mexican pesos could be found in China and Philipines.

After the decree of July 6, 1785, the peso became the official system of all North America, and became the foundation for the American system, at a rate 1 peso = 1 dollar. The American dollar was not issued until April 2, 1792, but the peso continued to be officially recognized and used until February 21, 1857. In Canada, it remained a legal medium of payment until 1858.

Throughout most of the 20th century, the Mexican peso had remained one of the most stable currencies in Latin America, since the economy did not experience periods of hyperinflation common to South America.Yet, after the Oil Crisis of the late 1970s, Mexico defaulted on its external debt in 1982, and experienced several years of high inflation and devaluation until a government economic strategy called "Pacto" was established 1989. In 1993 the government began issuing the "nuevo peso", new peso, which was to replace the old currency at a rate of 1000 pesos to 1 new peso. The modifier "nuevo", new, was dropped in 1996.

Nowadays, due to the stability of the Mexican economy, and the growth in foreign investment, the Mexican peso is among the 15 most traded currency units in the world, and the most traded in Latin America.

Current system

On 1 January 1993, Mexico adopted a new currency, the nuevo peso ("new peso", or MXN). The new peso was equal to 1000 of the obsolete MXP pesos.

On 1 January 1996, the modifier nuevo was dropped from the name and new coins and banknotes – identical in every respect to the 1993 issue, with the exception of the now absent word "nuevo" – were put into circulation. The ISO 4217 code, however, remained unchanged as MXN.

Coins

The coins currently in circulation have face values of 10¢, 20¢, 50¢, $1, $2, $5, $10, and $20. A $50 coin also exists and is legal tender, but it was not included in the 1996 issue. It is extremely rare and largely disliked by users (the $20 coin is slightly less rare, but disliked just as intensely). Coins worth 5¢ were also introduced at the changeover; they are now rare, however, and might even have been withdrawn from circulation. All the coins incorporate design elements from the Aztec Calendar.

(The $50 coin must be distinguished from the Mexican gold bullion 50-peso coin, which contains 37.5 grams (1.2067 troy ounces) of pure gold and, of course, does not circulate at face value.)