Mexican Peso-MXN

The peso is the legal tender of Mexico. A peso is denoted by sign $ or Mex $ (in order to differentiate it from other dollar denominated currencies) and its international exchange code (ISO 4217) is MXN. Before 1993 reevaluation of the Mexican peso was denoted by the code MXP.

Modern peso and all dollar currencies share a common origin- which traces back to the 15th–19th century.  Spanish dollar, most continuing to use its sign, “$”.

At present, the Mexican peso is the 12th most traded currency in the foreign exchange market and the third most traded currency in the Americas, and undoubtedly the most traded currency in Latin America.

The peso is subdivided into 100 centavos, and denoted by symbol “¢”. The name peso is derived from earlier used coins called as pesos oro (gold weights) or pesos plata (silver weights). The exact English translation of the Spanish word peso is weight.

History

First peso

Commemorative two pesos coin from 1921

The peso was formerly the name of the eight-real coins issued in Mexico by Spain. These coins also known as the Spanish dollar or pieces of eight were extensively used right through Americas and Asia in 19^th century when Spanish Empire was at its peak.

Following Mexico’s independence in 1821, the new administration continued using the same monetary system of 16 silver reales = 1 gold escudo. The peso bearing the value of 8 reales was the largest silver coin. In the meantime, paper based currency was also issued, denominated in pes.

Coins denominated in centavos were issued for the time in 1863; and its worth was one hundredth of the peso.  Soon after in 1866, coins denominated “one peso” were introduced. However, coins denominated in reales continued to be issued until 1897.

Then in 1905, the proportion of gold used in peso was reduced by 49.3% but the silver content of the peso remained initially unchanged (subsidiary coins were debased).

After 1918, both the weight and the metallic composition of all the silver coins changed (proportion of silver declined significantly); this trend continued until 1977, when the last silver 100-peso coins were minted.

Second peso

During most part of the 20th century, the Mexican peso continued to be as one of the very few stable currencies in Latin America, as its economy did not went through the periods of hyperinflation common to other countries in the region. Nonetheless, following the Oil Crisis of the late 1970s, Mexico defaulted on its external debt in 1982, and as a consequence the country had to experience substantial capital flight, amid inflation which stretched for many years and devaluation.  At that moment, in order to save the flagging economy, government economic strategy called the “Stability and Economic Growth Pact” (Pacto de estabilidad y crecimiento económico, PECE) was implemented under President Carlos Salinas.

Later, (on January 1, 1993) the Bank of Mexico launched a new currency, the nuevo peso (in English it means”new peso”, or MXN), denoted by symbol “N$” followed by the numerical amount. One new peso, or N$1.00, was equivalent of 1000 of the obsolete MXP pesos.

On January 1, 1996, the word “Nuevo” was dropped from the name and new coins and banknotes – similar in every aspect to the 1993 issue, were put into circulation. However, the ISO 4217 code remained unchanged as MXN.

As Mexico’s economy stabilized in 1990’s followed by rapid growth in economy and foreign investment the Mexican peso turned into a stable currency; and, at present it is among the 15 most traded currency units. Since the later part of the 1990s the peso has traded at about 9 to 15 pesos per U.S. dollar.

Peso outside Mexico

The Spanish dollar or Mexican peso was extensively circulated in the early United States. Following a declaration of July 6, 1785, the value of the United States dollar was fixed approximately to Spanish dollar. Both of these currencies were equivalent based on the weight of silver in the coins.  The first U.S. dollar coins were not issued until April 2, 1792, and the peso was treated as the officially recognized currency and it circulated widely along with other foreign coins, until February 21, 1857.

In Canada, also the Spanish dollar remained a legal tender, together with some other foreign silver coins, until 1854 and continued to circulate beyond this date. The Mexican peso  also served as the basis for the introduction of new  currencies such as Straits dollar, the Hong Kong dollar, the Japanese yen and the Chinese yuan.

The term Chinese yuan is based on round Spanish dollars, Mexican pesos and other 8 reales silver coins- which were widely used in China during the 19th and 20th century. For a short time, the Mexican peso was also a legal tender in 19th century Siam, when government mints could not manage a sudden arrival of foreign traders, and was exchanged at a rate of three pesos to one Thai baht, overcoming the shortage of coins.

Coins

19^th century

The first coins under the “peso” currency were called as 1 centavo pieces, minted in 1863. Emperor Maximilian, head of state of the Second Mexican Empire from 1864–1867, minted the first coins with marking the word “peso” on them. While emperor’s portrait was on the obverse, depicting the legend “Maximiliano Emperador;” the reverse showed the imperial arms and the legends “Imperio Mexicano” and “1 Peso” and the date. They were produced from 1866 to 1867.

The New Mexican republic continued to striking the 8 reales piece, but simultaneously it also started minting coins that were denominated in centavos and pesos. As a result, in addition to copper 1 centavo coins, silver (.903 fineness) coins of 5, 10, 25 and 50 centavos and 1 peso were introduced between 1867 and 1869. Then in 1870, gold 1, 2½, 5, 10 and 20-peso coins were introduced.

While the obverses of all these coins featured the Mexican ‘eagle’ and the legend “Republica Mexicana.,  the reverses of the larger coins depicted a pair of scales and those of the smaller coins, the denomination. One-peso coins were produced between 1865 and 1873, a period where the production of 8 reales coins recommenced. In 1882, even though cupro-nickel 1, 2 and 5 centavos coins were issued, minting of these coins halted for two years. In 1898, 1 peso coins were reintroduced bearing a Phrygian cap, or liberty cap- a design being carried over from the 8 reales.

20th century

In 1905 a monetary reform was introduced in which the proportion of the gold content in the peso was reduced by 49.36% and the silver coins were (with the exception of the 1 peso) reduced to token issues. At that moment, bronze 1 and 2 centavos, nickel 5 centavos, silver 10, 20 and 50 centavos and gold 5 and 10 pesos were issued.

In 1910, a new peso coin was issued, called as Caballito, this new issue was very famous as it was considered as one of the most beautiful of Mexican coins. T

The obverse carried the image of Mexican official coat of arms (an eagle holding a snake in its beak, and standing on a cactus plant) and the expressions “Estados Unidos Mexicanos” and “Un Peso.” The reverse depicted a woman riding a horse, her hand lifted high in exhortation, and the date. These coins were minted in .903 silver during the period of 1910 – 1914.

In the period between 1917 and 1919, the gold coinage issued new denominations which included 2, 2½ and 20-peso coins. However, circulation of gold coins completely stopped in 1921. In 1918, the peso, just like most other foreign currencies was debased amid depleting gold reserves, bringing it into line with new silver 10, 20 and 50 centavos coins.

All of these coins were now minted in .800 silver for peso carrying a weight of  14.5 g. The liberty cap design, which was struck on other silver coins, now applied to the peso. Later in 1920, another debasement brought down the fineness to .720 with 12 g of silver to the peso. Between 1919 and 1920, bronze 10 and 20 centavos coins were introduced; however coins of having these denominations were also minted in silver until 1935 and 1943, respectively.

In 1947, silver coins having new images were struck. The new issue included 50 centavos and 1 peso having .500 silver finenesses and a new 5-peso coin in .900 fineness. An image of José María Morelos appeared on the 1 peso and this feature continued to exist until its demise. The silver composition of this series was 5.4 g to the peso. Then in 1950 this content was changed to 4 g. just then coins having .300 finenesses with denominations of 25 and 50-centavo and 1-peso coins were also minted alongside .720 fineness 5 pesos. A new picture of Morelos appeared on the 1 peso, with Cuauhtemoc on the 50 centavos and Miguel Hidalgo on the 5 pesos. No changes were made in the silver content except on the 5 pesos. In this period 5 peso, and to a small extent, 10 peso, coins were also used as vehicles for special commemorative striking.

Bronze 50 centavos were introduced in 1955, together with smaller 5-peso coins and a new 10-peso coin. In 1957,  1-peso coins were issued in .100 silver for the first time. This series included 1.6 g of silver per peso. A unique 1 peso was minted in 1957 to commemorate Benito Juárez and the constitution of 1857. These were the last editions in silver pesos. The 5-peso coin now weighed 18 grams made with 0.720 silver; the 10-peso coin weighed 28 grams and contained 0.900 silver.

Between 1960 and 1971, a new array of coins were introduced, which included  brass 1 and 5 centavos, cupro-nickel 10, 25 and 50 centavos, 1, 5 and 10 pesos and silver 25 pesos (only issued 1972). In 1977, silver 100 pesos were launched. Then in 1980, smaller 5-peso coins were introduced together with 20 pesos and (from 1982) 50 pesos in cupro-nickel. In the period between 1978 and 1982, the sizes of the coins with denominations of 20 centavos and above were reduced; subsequently between 1984 and 1988, base metal 100, 200, 500, 1000 and 5000-peso coins were introduced.

Nuevo peso

The introduction of the nuevo peso (new peso) was due to hyperinflation in Mexico. In 1993, Presidente Carlos Salinas de Gortari removed three zeros from the peso, bringing a parity of $1 New Peso for $1000 of the old ones.

During this transition phase, people were allowed to trade in their old notes, but simultaneously old notes were also removed from the circulation. This change took a period of three years from January 1, 1993 to January 1, 1996. At that point, the word “nuevo” was no more printed in all newly produced coins; besides, “nuevo” notes were also stopped in circulation, and thus it marked the return of a system where the currency and the notes were denominated only in pesos.

Confusion was circumvented by making the “nuevo peso” currency almost alike to the old “peso”. Both of these versions circulated at the same time, while all currency that only said “peso” was completely taken off from circulation. The Banco de México (Bank of Mexico) later issued new currency showing new graphics, also under “nuevo peso”. These new addition was shortly followed by the current, more or less identical, “peso” currency without the word “nuevo”.

In 1993, coins of the new currency (dated 1992) were issued. The new series included the denominations of 5, 10, 20 and 50 centavos, 1, 2, 5, 10, 20 and 50 nuevos pesos.  Whereas 5 and 10 centavos were minted in stainless steel, 20 and 50 centavos were minted in aluminum bronze.

The nuevo peso denominations had a bimetallic composition. Denominations of  1, 2 and 5 nuevos pesos were made from aluminium bronze centers and stainless steel rings, and the 10, 20 and 50 nuevos pesos were produced from .925 silver centers and aluminum bronze rings. In 1996, the word nuevo(s) was not included in the coins. New 10 pesos were introduced with base metal substituting for the silver centre.  At present,  20, 50, and 100-peso coins are the only circulating coinage in the world to contain any silver.

In 2003 the Bank of Mexico started the launch of a new series of bimetallic $100 coins in a phased manner. While the obverse of these coins depicts the traditional Coat of arms of Mexico, their reverses bears the individual coats of arms of the component states. The first states to be honored in this manner were Zacatecas, Yucatan, Veracruz, and Tlaxcala. These coins are extremely rare in circulation; nevertheless their uniqueness offsets the awkwardness most users feel at having such a big amount of money in a single coin. Even though the Bank has tried to encourage users to collect complete sets of these coins, issuing special display folders for the purpose, the high cost associated with making of these coins has worked against them. Gold versions of these coins have also been issued, with the outer ring made of gold, in place of aluminum bronze.

The coins that are frequently found in circulation have face values of 50¢, $1, $2, $5, and $10. The $50, 10¢ and 5¢ coins are hardly found under circulation and largely disliked by users. The $20 coin is not as commonly used as the $20 banknote. By 2006 and early 2007, the usage of 20¢ coins also started to decline gradually.

Although small commodities are priced in multiples of 10¢, many retailers may prefer to round the total prices to 50¢. It is not uncommon in Mexico to find customers in supermarkets being asked to donate those cents to charities so that they can round the amount to 50¢ or 1 peso.

Banknotes

First Peso

The first banknotes issued by the Mexican state were made in 1823 by Emperor Iturbide in denominations of 1, 2 and 10 pesos. Similar issues were produced by the republican government in the same year. In 1866, Emperor Maximilian also issued ten-peso, but by 1920s, the responsibility of banknote production lay completely in the hands of private banks and local authorities.

In 1920, the Monetary Commission (Comisión Monetaria) launched  50-centavo and 1-peso note even as the Bank of Mexico started circulating 2-peso notes. From 1925, the Bank started issuing banknotes having denominations of 5, 10, 20, 50 and 100 pesos; followed by issue of 500 and 1000 pesos in 1931. From 1935, the Bank also started circulating 1-peso notes , followed by 10,000 pesos from 1943 onwards.

In 1962, production of 1-peso notes completely ended, followed by 5 pesos in 1971, 10 and 20 pesos in 1977, 50 pesos in 1984, 100 pesos in 1985, 500 pesos in 1987 and 1,000 pesos in 1988.  Then in 1981, 5,000-peso notes were introduced, followed by 2,000 pesos in 1983, 20,000 pesos in 1985, 50,000 pesos in 1986 and 100,000 pesos in 1988.

Second peso

Series B and C

From 1993 onwards, notes were introduced in the new currency for 10, 20, 50, and 100 nuevos pesos. The bank has labeled this new series as “series B”. (It is imperative to know that this series designation is not the 1 or 2 letter series label printed on the banknotes themselves.)  These notes were printed with the date July 31, 1992 and continued having the same designs (corresponding notes of the old peso).

Later on October 1994, Series C was launched with brand new designs. The word “nuevos” continued to exist and 500 nuevos pesos were added. All currencies in this series were printed with the date December 10, 1993.

Series D

The next series of banknotes, dubbed as series D, was introduced in 1996. The series D is modified version of series C. In this series the word “nuevos”  is dropped, the bank title changed from “El Banco de México” to “Banco de México” and the part “pagará a la vista al portador” removed.

Each denomination under this series has been printed on several dates. In 2000, a commemorative series was launched which was fairly identical to series D except for the added text “75 aniversario 1925-2000” under the bank title. This phrase marks the 75th anniversary of the Bank. Even though series D includes the $10 note and still continue to be considered as a legal tender, they are no more printed, hardly found in circulation, but the coin is more common. $10 notes are not commonly found in circulation.

Since the beginning of 2001, each denomination in the series was improved progressively. On October 15, 2001, in an effort to tackle widespread counterfeiting, Series D notes of 50 pesos and above were changed significantly – which saw an addition of an iridescent strip.

Notes bearing the face value of 100 pesos and above now have the denomination printed in color-shifting ink in the top right corner. Then on September 30, 2002 a new $20 note was introduced. The new $20 is printed on polymer plastic – which is long lasting and does not turn untidy very soon unlike ordinary paper.  On November 15, 2004, a new $1000 note was issued. The notes such as $20, $50, and $1000 are referred by the Bank of Mexico as notes as “series D1”, as these were notes  issued during wave of changes.

On April 5, 2004 the Chamber of Deputies announced that it would send a formal request to Banco de México to  produce more notes and coins that are identifiable by the blind population by January 1, 2006 ( it is estimated that Mexico has more than 750,000 visually impaired citizens, including 250,000 that are totally blind).

On December 19, 2005, $100, $200, and $500 MXN banknotes were issued that had tactile patterns (like Braille), supposed to make them discernible for people with vision incapacities.  Nevertheless, this system has been criticized and many demand that it be replaced by genuine Braille so it can be used by foreigners not accustomed to these symbols.  The Banco de México, though, insists they will continue issuing the symbol bills.

Series F

In September 2006, it was announced that a new family of banknotes would be introduced in phased manner.  While the 50-peso denomination made out of polymer was introduced in November 2006, a 20-peso note was launched in August 2007 followed by launch of 1,000-peso note in March 2008.

The $200 was issued in 2008, subsequently, $100 and $500 notes were released in August 2010 and all these issues come under the F Series.

Commemorative Bills

On September 29, 2009, The Bank of Mexico revealed the blueprint of its Commemorative Banknotes. The 100-peso denomination bill honors the centennial of the Beginning of the Mexican Revolution (1910–1920). The 200-peso denomination bill commemorates the bicentennial of the begining of the Mexican War for Independence which began in 1810.

• 100 Peso Banknote:  the design is printed on polymer note and has dimensions of 66 mm in length, and 134 mm in width. The front of the banknote shows a locomotive, which was used for the transportation of revolutionary troops, this signifies the armed movement that started in 1910.   The everse side of the banknote includes a segment, a mural titled “Del Porfirismo a la Revolución” (From the Dictatorship of Porfirio Díaz to the Revolution), also known as, “La Revolución contra la dictadura Porfiriana” (The Revolution against the dictatorship of Porfirio Díaz), which was painted by the artist David Alfaro Siqueiros. The Bank of Mexico printed 50 million 100-peso banknotes)

However, there was a printing mistake in these banknotes.  In very small letters ( barely discernible, as they are very small and  have identical color as the waving lines), near the top right corner, just above the transparent corn, from the side of the “La Revolución contra la dictadura Porfiriana”, it is written: “Sufragio electivo y no reelección” (Elective suffrage and no reelection), this is supposed to be a quote to Francisco I. Madero’s famous phrase, but, he had actually said “Sufragio efectivo no reelección” (Valid Suffrage, No Reelection).

The President Felipe Calderón publicly apologized for this error through newspapers and announced that the notes were going to continue in circulation, and that they would retain their value.

• 200 Peso Banknote: The 200-peso denomination bill marks the bicentennial of the Beginning of the Mexican Independence (1810–1821). This paper banknote carried print in a vertical orientation with dimensions of 66 mm in length and 141 mm in width. The obverse of the banknote shows the Mexican Leader of Independence, Don Miguel Hidalgo y Costilla, holding his banner that was soon after used by the independence fighters. The reverse portrays the iconic monument the “Ángel de la Independencia” which is situated in Mexico City on the Paseo de la Reforma.

International use

In the United States, some establishments (mainly supermarkets in border areas) accept peso as a legal in 2007, Pizza Patrón, a chain of pizza restaurants in the southwestern part of the U.S., created huge controversy since it started to accept the currency (peso). Apart from the U.S., Guatemalan and Belizean border towns accept peso but pesos are generally not accepted as currency outside Mexico.