Mexico’s peso experienced its steepest annual depreciation against the U.S. dollar since the global financial crisis of 2008, dropping nearly 23% in 2025. The currency closed the year’s final trading session at 20.82 pesos per dollar, marking a dramatic turnaround from earlier gains.

The peso began the year with months of steady appreciation, reaching a nine-year high of 16.26 pesos per dollar in April. This upward momentum was largely driven by market optimism ahead of June’s general election. However, the currency’s fortunes reversed sharply following the election results, which saw the ruling Morena party secure a decisive victory, consolidating power in the presidential office and achieving significant congressional majorities.

In September, Morena’s stronghold in Congress facilitated the passage of constitutional reforms, including a controversial judicial overhaul. Critics argue these changes jeopardize judicial independence in Latin America’s second-largest economy, adding to investor uncertainty.

The peso’s volatility was further exacerbated in November with the election of U.S. President-elect Donald Trump. His renewed threats of imposing tariffs on Mexican goods cast a shadow over Mexico’s trade-dependent economy, where approximately 80% of exports are destined for the U.S.

Mexico’s financial markets reflected broader economic challenges, with the main stock index plummeting nearly 14% to close the year at 49,513 points. This marked the index’s largest annual decline since 2018.

The combination of political shifts, economic policy concerns, and external trade pressures created a tumultuous year for Mexico’s economy, leaving investors and policymakers grappling with the implications for 2026.