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How does Mexican currency affect manufacturing costs?

15 Jul 2014


A devaluation in the Mexican peso (MXN) with respect to the U.S. dollar (USD) buys more pesos for each dollar which effectively lowers costs incurred in Mexico. However, currency devaluation is typically followed by an increase in wages.

Historically, foreign companies have benefited financially by having operations in Mexico since the currency devaluates.

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