Job Discussion Forums

[roadwalker]

Hi, I'm considering Mexico for later this year. And I'm little out of touch with daily life in Mexico since before the Peso went from about 11 to the dollar to more than 14. Other than people with loans, credit card bills etc. to pay, how has it affected the economic life of an English teacher? Inflation? If so, have salaries started to creep up too? What about locals and their living standards? Plenty of work still available, and students who can pay?

[Guy Courchesne]

Inflation had been creeping up steadily for a few years before the peso fell to 14 to the dollar. While a lot of products from the US shot up in price as the peso tumbled, I haven't seen a big increase on local services or goods. In fact, gas for home water heating and cooking dropped recently, from 310 pesos per 30 litre tank to 285, though those prices, along with gasoline, are set by the state.

On a recent trip to Costco, I noticed a number of US goods way up in price while others have remained the same for years.

Wages in EFL teaching in Mexico City haven't risen much at all over the last few years and will probably not move at all in 2009 as a lot of companies are cutting budgets here for EFL instruction. I'm guessing there will be a rise in students seeking private, one-to-one classes as the need for English proficiency remains or gets stronger as more people compete for fewer good jobs. We saw this happen in 2001/2 during that recession.

I think we'll have to wait until the summer to see how 2009/10 contracts work out for those in the private primary, secondary, and post-secondary education sector. I would bet that pay will remain the same for many, and there may be staff cutbacks.

In my opinion, local living standards in Mexico City had been on the rise for several years. Property prices have risen steadily and the middle class has grown. All that will probably take a hit this year.

One cue for me on the economy here is the number of street vendors. The city fairly recently started moving vendors off select streets around town in a bid to clean up the sidewalks and then enforced the policy rigorously. I've noticed lately that the vendors are starting to return, meaning, lax enforcement. I'd bet the government doesn't want to push too hard as people lose jobs.

[MO39]

[TheLongWayHome]

Speaking for SLP, salaries really aren't going up but the price of goods is. You can of course charge more for your services but wages in language schools have remained pretty much the same for the last 5 years.

Uni & high school classes are probably the safest bet at the moment as the above mentioned budget cuts have meant that there are drastically fewer company classes around, and more schools fighting over them (usually the chains).

Utilities have remained more or less stable and still relatively very cheap but rent is going up at a sharper rate.

More street vendors here too, though what's alarming is the increase in 'street services/begging' - at every traffic light, on every street corner, in nearly every car park there's someone asking for money, selling something, offering to wash your car, offering to look after (not steal) your car, help you park or just stand behind your car and ask for money when you get out.

As long as you're making at least $8000 a month you can have a pretty comfy life here and afford the plane ticket home. It's not really enough to pay off debts though.

[dixie]

[roadwalker]

Thanks for the info. I will keep an eye on this forum. Of course that's the situation now. I think things will be rougher all over by the end of the year. Hopefully, I'm wrong as usual.

[cwc]

I like being on the winning side of the currency exchange for a change. I sent money to Mexico yesterday and got 15.22. I was getting money from the states when we had the "super peso", 9 to 1.

[Prof.Gringo]

I guess it's time to change those dollars for pesos!

[raulyn]

Mexican Peso to Rally on IMF, Fed Lines, Goldman Says (Update1)


By Valerie Rota

April 2 (Bloomberg) -- Mexico�s peso will rally on the country�s plans to seek a $47 billion credit line from the International Monetary Fund and tap a $30 billion swap line with the Federal Reserve, Goldman Sachs Group Inc. said.

Mexico�s peso will climb to 13.25 per U.S. dollar in three months, from 13.75 today, Paulo Leme, chief Latin America economist at Goldman Sachs in Miami, wrote in an e-mailed report today. The currency will advance to 13 per dollar in six months and 12.9 in a year. He previously forecast the peso would weaken to 14.5, 14.75 and 15 per dollar in the next three, six and 12 months, respectively.

�The resources from the IMF and the Fed will significantly strengthen Mexico�s external payments position, thus reducing speculative or hedging pressures� against the peso, Leme wrote. �The risk to this forecast is to the upside, meaning that we may reach the 12-month forecasts rather quickly.�

Mexico yesterday said it asked the IMF for the credit line and announced it will use a swap line with the Fed.

The peso surged 1.1 percent today, leaving it up 12.2 percent in the past month, the best performance among the six most-traded currencies in Latin America.

Leme revised his forecast for Mexico�s benchmark lending rate, saying in the note that the stronger peso will ease inflation and give the central bank more room to lower borrowing costs.

A strengthening peso �will reduce the size and persistence of the exchange rate pass-through on inflation,� he wrote.

Banco de Mexico will cut its overnight lending rate to 4.5 percent by June, according to Leme. He previously projected the bank would reduce its benchmark rate to 5.75 percent by May and leave it unchanged at that level for the rest of the year.

To contact the reporter on this story: Valerie Rota in Mexico City at [email protected].
Last Updated: April 2, 2009 14:20 EDT

[raulyn]

Mexican Peso Posts Its Best Weekly Gain Since 1995 on Swap Line


By Valerie Rota

April 3 (Bloomberg) -- Mexico�s peso rose, posting its best weekly gain since April 1995, after the central bank said it plans to tap a $30 billion swap line with the Federal Reserve.

The peso surged 1.4 percent to 13.56 per U.S. dollar at 5 p.m. New York time, compared with 13.7520 yesterday. It earlier touched 13.5107, the strongest since Jan. 8. The peso rose 5.8 percent this week, leaving it up 13.2 percent in the past month.

�The use of the swap line is going to really help buoy liquidity in the market,� said Alejandro Hernandez, who oversees 11.4 billion pesos ($841 million) in fixed-income assets at Grupo Financiero Interacciones SA in Mexico City.

Banco de Mexico said in a statement it will swap $4 billion and auction the funds in 264-day loans on April 21 to supply companies with dollars to meet their financing needs. The central bank will set a minimum rate of 0.5 percentage point above the overnight index swap rate in the auction and will seek an extension of the Fed line, which expires this year.

The central bank�s announcement comes after the government said this week it will seek a $47 billion credit line from the International Monetary Fund to help shore up foreign reserves.