Elerror De Diciembre

Whether it was a “mistake of December” or not, it did lead to the downfall of peso (the official currency of Mexico) – to the extent that the downfall became one of the most dreadful crisis in Mexico’s history. After being tattered by crisis during eighties, Mexico’s move towards free market economy left the country in a situation that made its currency more vulnerable to external shocks. And to cope with these external shocks, the floating band of peso was widened; it led to a 15% devaluation. And to aggravate the situation further, the peso was allowed to float freely against the dollar. This resulted in a capital exodus, exacerbating the fall of the peso to unprecedented levels.

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Source IIPM-Editorial,2006