The Mexican peso’s depreciation has hit the pockets of border residents.
While the purchasing power of people south of the border has declined due to the devaluation, businesses north of the border have also felt the effects, as many of them depend on these customers to a great extent.
This week, the U.S. dollar reached a historic high of nearly $18 pesos per dollar at currency exchange counters, a depreciation of approximately 17% in the value of the peso versus the previous year.
During his recent visit to Tijuana for the inauguration of the customs pre-inspection program, Mexico’s Secretary of Finance and Public Credit Luis Videgaray insisted that, in spite of it, Mexico is growing economically, which enables the country to face international uncertainties.
“I believe that this is a reality that we are living not only in Mexico… it is a global reality… that’s the first thing we need to understand as border residents, as central Mexico residents, as southern residents; we need to understand that all emerging currencies are seeing an increase in the [U.S.] dollar”, he said during a press conference with media outlets from both sides of the border.
During the inauguration ceremony for the joint customs inspection program in Tijuana, he expressed that infrastructure projects that expedite cross-border trade improve global competitiveness, which benefits the border region’s economy.
According to financial analysts, the Mexican currency has been affected by the fall in Mexican oil prices – which are at one of their lowest points in over a decade – and the depreciation of the Chinese yuan.
Contrary to one might think, the collapse of the peso versus the U.S. dollar has not caused a decrease in the number of northbound border crossings; however, while the number of vehicles and pedestrians remains relatively unchanged, consumers are choosing to limit how much they spend.
Some San Ysidro businesses have reported sales losses versus the previous year. It is estimated that about 85% of San Ysidro shoppers come from Mexico, according to data provided by the San Ysidro Chamber of Commerce.
“I used to come to San Diego at least twice a week to go grocery shopping, have fun, or buy clothes, but now I hesitate… it has become very expensive”, shared Tijuana resident Ana Galicia. She also added that while a year ago she would spend about $100 dollars per trip to
San Diego, she now limits herself to getting just the essentials.
Ivanna Cantú, another border crosser – in this case from Ensenada – stated that she “no longer goes shopping in San Diego as often” and that her current trips across the border are now basically to “check the mail and make payments on credit cards”.
She closed by saying that “Vacationing in the United States is not as affordable anymore”.
