MEXICO CITY - Once a laggard of the international foreign exchange market, the Mexican peso is among the world's best-performing currencies this year.
A combination of high interest rates in Latin America's second-largest economy, financial stability as well as inflows of remittances and foreign investment have seen the Mexican currency post double-digit percentage gains against the dollar in 2023.
Some 4.6 million households across the country receive remittances -- the country's largest source of foreign currency -- largely thanks to the Mexican diaspora in the United States.
The government estimates that in 2023 remittances could exceed last year's record high of more than $58 billion.
This month the Mexican currency reached its strongest levels against the greenback since 2016, earning itself a new nickname -- the "super peso."
On Friday, it stood at around 17.1 per dollar, compared to 25 in March 2020 when the coronavirus pandemic began.
Analysts say the peso's strength is in part due to the high level of the Mexican benchmark interest rate, which is now 11.25 percent.
The lending rate has been raised to fight inflation but has also attracted investors seeking higher returns.
The peso has also been boosted by the so-called "nearshoring" trend of US companies like electric carmaker Tesla moving their production closer to home in Mexico instead of Asia, experts say.
"When investors look for where to invest and look at emerging markets, there's no other country with a narrative like Mexico with nearshoring," said Carlos Capistran, an economist at Bank of America Merrill Lynch.