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    The Mexican Peso

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    Deri Firmansyah
    The document discusses the Mexican peso and analyzes government macroeconomic policies that affected firms and banks doing business in Mexico. It asks questions about the causes of peso devaluation, the role of oil prices, effects on companies, and how government policies impacted Mexico's financial health.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    The Mexican Peso

    Uploaded by

    Deri Firmansyah
    132 views4 pages
    The document discusses the Mexican peso and analyzes government macroeconomic policies that affected firms and banks doing business in Mexico. It asks questions about the causes of peso devaluation, the role of oil prices, effects on companies, and how government policies impacted Mexico's financial health.

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    Tugas Multinational Finance

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    The document discusses the Mexican peso and analyzes government macroeconomic policies that affected firms and banks doing business in Mexico. It asks questions about the causes of peso devaluation, the role of oil prices, effects on companies, and how government policies impacted Mexico's financial health.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    132 views4 pages

    The Mexican Peso

    Uploaded by

    Deri Firmansyah
    The document discusses the Mexican peso and analyzes government macroeconomic policies that affected firms and banks doing business in Mexico. It asks questions about the causes of peso devaluation, the role of oil prices, effects on companies, and how government policies impacted Mexico's financial health.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 4

    The Mexican Peso

    The basic purpose of this case is to have you conduct an in-depth analysis of government
    macroeconomic policies on firms and banks doing business with Mexico. The vehicle being used is the
    Mexican peso. See Exhibit III 2.1 for statistics related to exchange rates and price indexes in the United
    States and Mexico for the period 19761997. Using these data, please address the following questions.

    Questions

    1. What are the causes of the continuing devaluation of the peso since August 1976? Analyze both the
    immediate causes (e.g., balance-of-payments deficits) and longer-term, more fundamental causes (e.g.,
    inflation, the political and economic environment). Concentrate especially on the 1982 and 19941995
    devaluations of the peso.

    2. What role did oil price changes play in Mexicos difficulties?

    3. What indicators of peso devaluation prior to 1982 and 1994 were there?

    4. What were the likely effects of the peso devaluation between 1976 and January 1982 on
    a. Mexican companies?
    b. Foreign firms operating in Mexico?
    c. U.S. companies in border towns catering to Mexicans?

    5. Redo question 4, focusing on the effects of peso devaluation subsequent to February 1982 and prior to
    December 1994.

    6. In August 1982, the Mexican government devalued the peso, froze all dollar accounts in Mexican
    banks, and imposed currency controls. What are the governments objectives? How did these actions
    affect the black market value of the peso? Why?

    7. How did the Mexican governments expropriation of Mexico City real estate, following the
    September 1985 earthquake, affect the value of the peso and why?

    8. Consider the trust factor with respect to Mexican policies. What have been the probable effects of
    trust or its lack on investment in Mexico, Mexican citizens investment choices, and the pesos value?

    9. Are dollar loans to the Mexican government and Mexican companies exposed to exchange risk?
    Explain.

    1 Copyright 2005 John Wiley & Sons, Inc.


    10. How did Mexicos economic policies contribute to its debt crisis? How have subsequent government
    policies affected Mexicos financial health?

    2 Copyright 2005 John Wiley & Sons, Inc.


    3 Copyright 2005 John Wiley & Sons, Inc.
    4 Copyright 2005 John Wiley & Sons, Inc.

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