Latest Citi poll of Mexico-based analysts sees weakened peso through 2027

The Citi Survey of Expectations, published on Tuesday, indicates that the Mexican peso is unlikely to regain its previous exchange rate strength. Analysts surveyed predict the peso will trade at 18 pesos per dollar by the end of 2026, a slight deterioration from the 17 peso level it reached briefly in late August and early September.

This weaker trend is expected to continue, with the peso weakening further to 18.50 pesos per dollar by the close of 2027. However, some analysts foresee the peso approaching 20 pesos per dollar. Previous expectations ranged from 16.80 to 18.80 per dollar by the year's end, reflecting the inherent uncertainty in economic forecasting.

While some financial institutions anticipate a more favorable outcome, others expect a quicker depreciation of the peso. The consensus among analysts is that the peso will weaken further against the dollar in 2027, but the exact extent of this depreciation remains uncertain. The peso depreciated significantly during September, falling 6% overall and losing 46 centavos against the dollar between September 28 and October 2.

Analysts attribute this slump to heightened global risk aversion and concerns over inflation and interest-rate differentials. The Bank of Mexico's interest rate, which remains at 6.5% through the end of 2027, according to 25 of 37 surveyed analysts, is seen as a significant factor in the pessimistic outlook for the peso's value.

Upcoming reports from the U.S. Federal Reserve could offer further insight into interest rate policies and Federal Reserve plans, influencing future forecasts.