In last week's trading, Mexico's Peso declined against the USD. On Friday's market, this lowered value shows concerns about the crisis in the United States, so it dropped over 5% since its peak earlier, namely in March.

The market comes amid increased volatility for the Mexican Peso currency in the past week amid fears of a broader financial crisis. It was also stated that bank failures in the United States triggered this crisis. Which decline and slip are directly related to the US economy.

The Peso closed down 0.86% to 18.86 to the dollar. Meanwhile, the counterpart to the Peso market shows that traders are flocked to the dollar zone. So there is a possibility of a decrease in several percentage points from the star of the week at different intervals.

"The appreciation of the Peso occurred because of the reduction of risk aversion, especially in the global financial market. Apart from that, there is also additional upward pressure that cannot be ruled out," said one of Mexico's Banco Base analysts to the media.

Mexican Central Bank Main Focus is on Tackling Inflation as Bank Governor Sees no Contagion in Mexico from US Banking Crisis

During economic conditions that are continuing to decline and the Peso's value has not increased, what is now giving additional concern is regarding how the Mexican central bank will respond. However, what can be seen now are government bonds.

The Mexican Central Bank chose to let go of the focus on news of the Peso's decline first. Many say that the central bank should help the Peso's value increase again. But what can be seen is the focus on inflation.

The Deputy Governor of the Bank of Mexico, Galia Borja, had this to say on Friday night. When he was asked about how fears of a baking crisis were roiling US and European markets, he said there would be an impact, which would lead to monetary policy.

Borja told Reuters that the primary variable is inflation, which is their mandate. She also added: "The behavior of inflation that is currently happening is more important. But still, we have to take everything into account when discussing economic developments,"

Meanwhile, Bank of Mexico Governor Victoria Rodriguez also said that the central bank needs to consider the monetary stance already reached. Data like this also provides an economic opportunity for growth.

Meanwhile, Mexico's core consumer prices are believed to be slower than expected, in the range of 8.29%. However, Rodriguez also explained that the central bank did not see a negative spillover on Mexican Bank, especially when looking at global financial markets.

Last time, the Bank of Mexico raised the key interest rate by 50 basis points to 11 percent. However, the meeting minutes showed that a modest rate rise could occur, especially after seeing no contagion in the Mexican Economy regarding the SVV case.

Mexico's Annual Inflation Managed to Reduce to 7.62% in February, and the Economy Expanded by 3.1% Last Year

While the Central Bank focuses on inflation, economists also wait to see what will be resolved. So for that, the effect also arises and makes Mexican annual inflation fall. Even just in February, compared to last year, its value rose 7.62%

Meanwhile, Mexico is also considered to be much improved in the economic sector. Mexico's Economy will have expanded by 3.1 percent in 2023. The Gross Domestic Product (GDP) increased by 0.5% in the last quarter of the year.

The Mexico Central Bank directs a constant focus on overcoming inflation rather than general problems that are usually the focus of central banks, one of which is related to currency. Even so, the Mexican Economy increased but had to sacrifice the trade value of the Mexican Peso.