Mexico

Definition

Mexico is a country in North America known for its significant role in global trade and finance. It maintains a floating exchange rate system, influencing its currency value against others like the U.S. dollar.

5 Must Know Facts For Your Next Test

1. The Mexican Peso (MXN) is the official currency of Mexico.
2. Mexico's central bank, Banco de México, plays a crucial role in managing monetary policy and stabilizing the peso.
3. Trade relationships, especially with the United States, significantly impact Mexico's foreign exchange rates.
4. Inflation rates and economic performance are key factors influencing the value of the peso.
5. Remittances from abroad are an important source of foreign currency for Mexico, affecting its exchange rate stability.

Review Questions

• What is the official currency of Mexico?
• How does Banco de México influence the value of the Mexican peso?
• Name two factors that can affect Mexico’s foreign exchange rate.

Related terms

Exchange Rate: The price at which one currency can be exchanged for another.

Floating Exchange Rate: A system where the value of a currency is allowed to fluctuate according to the foreign exchange market.

Remittances: Money sent by immigrants to their home country, often impacting the recipient country's economy and currency value.