MXN - Mexican Peso

The Mexican Peso is the official currency and legal tender of Mexico. It is divided into 100 smaller sub-units, called centavos (represented by ¢). Currently, the peso (currency code: MXN; currency symbol: $) is the third most-traded currency in both Latin and North America, right behind the U.S. and the Canadian dollars, and the most traded currency in all of Latin America. Being the direct descendant of the Spanish dollar makes it one of the oldest currencies in North America, and the ancestor of numerous other currencies, which include, among others, the U.S. dollar and Chinese Yuan. The smallest denomination of the Mexican peso is that of $10, although it is no longer printed, and can rarely be found in circulation. The largest bank note is that of $1000. As for coins, the smallest one is denominated at 5 centavos, and the largest one, made for commemorative purposes only, is denominated at $100.

History of the Mexican Peso

The origin of the name can be traced back to pesos oro or pesos plata (meaning gold or silver weights, respectively). It was previously used as the name for the eight-real silver coins issued in Mexico. The original was more commonly known as the Spanish dollar or a piece of eight, and widely circulated when the Spanish Empire was at its strongest. The peso was used in North and Latin America, and even in Asia. Following the Coinage act of 1857, and the birth of a U.S. dollar, the peso consequently lost its status as legal tender in the US.

The peso-based monetary system was also accepted by the new government, which was established after Mexico obtained its independence in 1821. Back then, 16 silver reales were equally valued as 1 gold escudo, and the largest silver coin was the 8-reales peso. Banknotes were also available, with denominations in pes. Mexico introduced the first issue of the peso coins which were denominated in centavos, which were one hundredth of the peso, in 1863, while the original 8-reales coins were still minted and available on the market, up until 1897. However, in 1905 and the following years, the gold content of the peso was cut down by 49.3% percent. Meanwhile, the silver content of the peso remained the same, up until 1918, when its content also started to decline. The last 100-peso silver coin was minted in 1977.

For the better part of the 20th century, the Mexican peso was considered one of the most stable currencies in Latin America, due to the fact that it wasn’t devalued by hyperinflation, as was the case with nearly all of the countries in the region. This stable period lasted until the late 1970s, and the Oil Crisis, after which Mexico experienced heavy capital flight, inflation and devaluation. Following a package of economic measures issued by the government, called the Stability and Economic Growth Pact, a new currency was issued in 1993, names the nuevo (new) Mexican peso (currency code: MXN), at the rate of 1000 old pesos for 1 nuevo peso. The “nuevo” bit of the name was abandoned after a while, and the currency was simply called peso.

Mexican Peso Coins

Currently, the coins which can be seen in everyday monetary transactions are the 50-centavo coins, as well as the 1, 2, 5 and 10-peso coins. Although coins denominated in 5, 10, and 20 centavos, and in 50 and 100 pesos exist, they are rare and unlikely to be found circulating. The 20-peso coin is a lot less popular than the equivalent paper note. There is not a large number of goods that can be bought for the amounts measured in tens of pesos, and the stores usually round out the price to nearest 50 centavos, or ask the buyers to donate those small denominations after they round out the price to 50 centavos of 1 peso.

Mexican Peso Banknotes

Banknote denominations which are currently in circulation are that of 20, 50, 100, 200, 500 and 1000 pesos. The 20-peso note shows a portrait of Benito Juarez on the obverse of the note. Apart from being the only full-blooded native to ever be president, he is also remembered as one of the greatest leaders in the history of Mexico, and is referred to as Mexico’s Abraham Lincoln. Jose Maria Morelos is depicted on the 50-peso bill, for his merits as a priest and field marshal during Mexico’s War of Independence.

The 100-peso banknote features Nezahualcoyotl, a poet from the Prehispanic period. Sor Juana Ines de la Cruz, or Juana de Asbaje, a poet and a nun during the colonial period, is shown on the 200-peso bill. The obverse of the 500-peso note features the face of Ignacio Zaragoza, a Mexican general who fought in the 5 de Mayo battle. On the reverse of the note is the Cathedral of Puebla. Finally, on the face of the 1000-peso bill is the father of Mexican independence, Miguel Hidalgo y Costilla. A lot of the stores won’t accept these for everyday purposes, unless it is used for the purchase of large ticket items.