The peso is the official currency of Mexico. This decimal currency is subdivided into 100 centavos. The peso has a long history of use throughout the world, due to Spanish traders, and holds the distinction of being the first currency to use the monetary symbol now widely recognized as that of the dollar ($). Today, the Mexican peso is the 12th most-traded currency on the foreign exchange market, the third most-traded in the American continents, and the most-traded in Latin America. The name of the currency derives from the Spanish word for weight and came into use in the phrases pesos oro and pesos plata, meaning gold weight and silver weight. The original ISO 4217 code for the Mexican peso was MXR, but after a revaluation of the peso in 1993, it was changed to MXN to distinguish the old and the new pesos.
The original peso is from Spain. It was the original name of the Spanish eight-real coins, more commonly known as pieces-of-eight or Spanish dollars. They were widely used throughout the world due to the reach of the Spanish Armada and Spanish traders. When Mexico gained independence in 1821, the Spanish currency system was adopted. The largest silver coin first issued by Mexico was the peso, but the official name remained the eight-real. Banknotes were also printed for larger denominations. The currency system of Mexico was decimalized in 1863, introducing the centavo as 1/100th of a peso and the word peso began to appear on the coins.
The Mexican peso was known as being one of the world’s most stable currencies throughout most of the 20th century. Mexico had avoided periods of hyperinflation that would hit the economies of other Latin American countries. However, the oil crisis of the 1970s caused Mexico to default on its foreign debt. International investors turned away from Mexico, and inflation rose severely. To bring stability to the economy, the Bank of Mexico introduced a new peso in 1993. The initial value of the new peso was set at 1000 old pesos. Since that time, the Mexican peso has remained relatively stable due to no economic downturns in the country and an increase in foreign investors. Today, 11 different denominations of coins are in circulation in Mexico. Values range from 5 centavos to 50 pesos. Banknotes are printed in denominations of 20, 50, 100, 200, 500 and 1000 pesos.