Mexican Peso Drops To Lowest Level In Two Years Against Dollar

By Mónica Ortiz Uribe
September 23, 2011

Photo by Jose Luis Jiménez
100 Mexican pesos.

EL PASO, Texas -- The Mexican peso has dropped to its lowest value in two years and the devaluation has positive and negative consequences for the Southwest border.

By Thursday afternoon, the U.S. dollar was worth nearly 14 Mexican pesos. That represents a nearly 12 percent drop for the peso since August.

Chris Erickson, a professor of economics at New Mexico State University, explains why.

“The reason for that is partially because the U.S. dollar has strengthened relative to other currencies," Erickson said.

A weak peso is a two-edged sword for many communities along the U.S.-Mexico border. Fewer Mexicans will cross into the United States to shop, but Mexican exports will be cheaper in the United States. Typically, a weaker peso means a boost in tourism to Mexico, but that's less likely due to ongoing drug violence across the country.