Peso devaluation hurting one border town, others not so much

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SAN YSIDRO, Calif. (Border Report) — San Ysidro Boulevard is lined with many small businesses selling clothing, cellphones and soccer balls. There are also countless money exchange houses on this street, and the two go hand-in-hand.

According to the San Ysidro Chamber of Commerce, 94% of people who frequent these establishments are residents from south of the border.

San Ysidro Boulevard just north of the border is lined with small shops and money exchange houses that cater primarily to people who cross the border to shop here.

In recent days, the Mexican peso has been losing value and shoppers who exchange their pesos for dollars don’t have as much buying power as they’re used to.

In some exchange houses, it takes almost 21 pesos to get $1 back. Just last week, it was a little more than 18 pesos.

“With the coronavirus fears, investors are turning to the dollar’s stability and investing in greenbacks making the dollar very strong, but in turn, currencies like the peso start to fall, and that has an effect on places like San Ysidro,” said Jason Wells, San Ysidro Chamber of Commerce Executive Director.

It’s a somewhat different story in El Paso County, Texas, where many of the international ports, including one nearby in Santa Teresa, N.M., are cargo ports. That not only means many of the transactions between U.S. and Mexican entities are handled in dollars, but the fluctuation in the peso in many cases is not an issue.

El Paso County Judge Ricardo Samaniego said it’s possible for many of the cross-border transactions to ignore the peso altogether.

“We’re pretty good about adjusting. We never gouge or take advantage. Juarez doesn’t take advantage,” Samaniego said. “It’s not that we shouldn’t be sensitive to it, but I think we’re a little more immune than most communities just because of the interaction with the dollar back and forth. A lot of the people that work here and live in Juarez have dollars.”

Also creating instability for the peso is the falling price of crude oil. It’s gone from about $54 per barrel in mid-February to about $33 now.

Mexico’s economy is heavily dependent on oil. Another reason for the peso’s devaluation.

Jason Wells runs the San Ysidro Chamber of Commerce where his members are facing a lot of uncertainty due to the peso’s devaluation.

Wells believes the coronavirus fears will ease soon and stability will return to his members.

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