### Dollar Could Reach 20 Pesos, Is Overvalued: AIMO
The uncertainty in global markets due to the potential economic recession in the United States has led to a withdrawal of investments from Mexico to other countries, stated José Luis Contreras Valenzuela, president of the Association of Industrialists of the Otay Mesa (AIMO).
As of Monday, exchange houses in Tijuana have reached an exchange rate of 18.80 pesos per dollar, whereas at the beginning of the year, the rate was 16 pesos per dollar. Contreras Valenzuela mentioned that the 16 pesos per dollar rate was “unrealistic” under the current economic conditions, indicating that it was overvalued.
“We are returning to the real exchange rate levels, which could be around 19 to 20 pesos,” he noted.
Contreras Valenzuela explained that the overvaluation of the peso was due to the significant influx of dollars into the country through remittances. He also expressed concerns that remittances might decline if they are sanctioned with tariffs when sent from the United States to Mexico, likely reducing considerably.
He pointed out that the nervousness in global stock markets is causing an exodus of investments from pesos, devaluing the national currency against the dollar. Additionally, he highlighted that the upcoming electoral process in the United States, conflicts in various parts of the world, and the economic contraction in the U.S. are increasing speculation in markets.
### Impact of the Strong Dollar on Mexican Economy: Additional Insights
The recent appreciation of the dollar relative to the peso has raised concerns among various sectors in Mexico, particularly the construction industry. According to the Mexican Chamber of the Construction Industry (CMIC), the increase in tariffs and costs of imported materials could lead to higher construction prices.
Moreover, inflation in Tijuana has surged, recording between 7% and 8% over recent weeks, putting additional strain on household budgets and local businesses. The maquiladora industry, a significant driver of the local economy, is particularly affected by the peso’s depreciation, as it relies heavily on dollar-denominated transactions.
Baja California, known for its medical tourism, drawing 3.5 million health tourists annually, could also see an impact. A weaker peso may discourage spending from American visitors, affecting the local healthcare sector and associated businesses.
Local authorities have voiced their concerns over fraudulent activities in visa processes due to the involvement of fake immigration lawyers, which remains a prominent issue for many seeking to cross the border legally. The city of Tijuana has also seen a rise in severe health conditions, such as invasive cancer cases among women, highlighting the need for increased healthcare resources and intervention.
In summary, the potential rise of the dollar to 20 pesos reflects broader economic challenges and highlights the complex interplay between global economic trends and local impacts in Tijuana and the wider Mexican economy.