The peso (sign: $; code: MXN) is the currency of Mexico. The peso was the first currency in the world to use the "$" sign, which the United States dollar later adopted for its own use when the United States adopted the peso as currency during a period before adopting the dollar. The peso is the 12th most traded currency in the world and by far the most traded currency in Latin America and third most traded in all the Americas.The current ISO 4217 code for the peso is MXN; prior to the 1993 revaluation, the code MXP was used. The peso is subdivided into 100 centavos, represented by "¢". The name was originally used in reference to pesos oro (gold weights) or pesos plata (silver weights). The literal English translation of the Spanish word peso is weight. As of June 23, 2010, the peso's exchange rate was 12.141 per Canadian dollar, 15.488 per Euro, and 12.658 per U.S. dollar.

History
First peso
The peso was originally the name of the eight-real coins issued in Mexico by Spain. These were the so-called Spanish dollars or pieces of eight in wide circulation in the Americas and Asia from the height of the Spanish Empire until the early 19th century. After Mexico gained its independence in 1821, the new government continued the Spanish monetary system of 16 silver reales = 1 gold escudo, with the peso of 8 reales the largest silver coin. Paper money was also issued, denominated in pesos.

In 1863, the first issue was made of coins denominated in centavos, worth one hundredth of the peso. This was followed in 1866 by coins denominated "one peso". Coins denominated in reales continued to be issued until 1897. In 1905, the gold content of the peso was reduced by 49.3% but the silver content of the peso remained initially unchanged (subsidiary coins were debased). However, from 1918 onward, the weight and fineness of all the silver coins declined, until 1977, when the last silver 100-peso coins were minted.

Second peso
Throughout most of the 20th century, the Mexican peso remained one of the most stable currencies in Latin America, since the economy did not experience periods of hyperinflation common to other countries in the region. However, after the Oil Crisis of the late 1970s, Mexico defaulted on its external debt in 1982 and experienced several years of inflation and devaluation until a government economic strategy called the "Stability and Economic Growth Pact" (Pacto de estabilidad y crecimiento economico, PECE) was adopted under President Carlos Salinas. On 1 January 1993, the Bank of Mexico introduced a new currency, the nuevo peso ("new peso", or MXN), written "N$" followed by the numerical amount. One new peso, or N$1.00, was equal to 1000 of the obsolete MXP pesos.

On January 1, 1996, the modifier nuevo was dropped from the name and new coins and banknotes -identical in every respect to the 1993 issue, with the exception of the now absent word "nuevo" -were put into circulation. The ISO 4217 code, however, remained unchanged as MXN.

Thanks to the stability of the Mexican economy and the growth in foreign investment, the Mexican peso is now among the 15 most traded currency units in years; since the late 1990s the peso has traded at about 9 to 13 pesos per U.S. dollar.

Use outside Mexico
The Spanish dollar or Mexican peso was widely used in the early United States. By a decree of July 6, 1785, the value of the United States dollar was set to approximately match the Spanish dollar, both of which were based on the weight of silver in the coins. The first U.S. dollar coins were not issued until April 2, 1792, and the peso continued to be officially recognized and used, along with other foreign coins, until February 21, 1857. In Canada, it remained legal tender, along with other foreign silver coins, until 1854 and continued to circulate beyond that date.The Mexican peso also served as the model for the Straits dollar, the Hong Kong dollar, the Japanese yen and the Chinese yuan.The term yuan refers to the round Spanish dollars, Mexican pesos and other 8 reales silver coins which saw use in China during the 19th century.

Coins
19th century
The first coins of the peso currency were 1 centavo pieces minted in 1863. Emperor Maximilian, ruler of the Second Mexican Empire from 1864-1867, minted the first coins with the legend "peso" on them. His portrait was on the obverse, with the legend "Maximiliano Emperador;" the reverse shows the imperial arms and the legends "Imperio Mexicano" and "1 Peso" and the date. They were struck from 1866 to 1867.

The New Mexican republic continued to strike the 8 reales piece, but also began minting coins denominated in centavos and pesos. In addition to copper 1 centavo coins, silver (.903 fineness) coins of 5, 10, 25 and 50 centavos and 1 peso were introduced between 1867 and 1869. Gold 1, 2½, 5, 10 and 20-peso coins were introduced in 1870. The obverses featured the Mexican 'eagle' and the legend "Republica Mexicana." The reverses of the larger coins showed a pair of scales; those of the smaller coins, the denomination. One-peso coins were made from 1869 to 1873, when 8 reales coins resumed production. In 1882, cupro-nickel 1, 2 and 5 centavos coins were issued but they were only minted for two years. The 1 peso was reintroduced in 1898, with the Phrygian, or liberty cap design being carried over from the 8 reales.

20th century
In 1905 a monetary reform was carried out in which the gold content of the peso was reduced by 49.36% and the silver coins were (with the exception of the 1 peso) reduced to token issues. Bronze 1 and 2 centavos, nickel 5 centavos, silver 10, 20 and 50 centavos and gold 5 and 10 pesos were issued.

In 1910, a new peso coin was issued, the famous "Caballito", considered one of the most beautiful of Mexican coins. The obverse had the Mexican official coat of arms (an eagle with a snake in its beak, standing on a cactus plant) and the legends "Estados Unidos Mexicanos" and "Un Peso." The reverse showed a woman riding a horse, her hand lifted high in exhortation, and the date. These were minted in .903 silver from 1910 to 1914.

Between 1917 and 1919, the gold coinage was expanded to include 2, 2½ and 20-peso coins. However, circulation issues of gold ceased in 1921. In 1918, the peso coin was debased, bringing it into line with new silver 10, 20 and 50 centavos coins. All were minted in .800 fineness to a standard of 14.5 g to the peso. The liberty cap design, already on the other silver coins, was applied to the peso. Another debasement in 1920 reduced the fineness to .720 with 12 g of silver to the peso. Bronze 10 and 20 centavos coins were introduced in 1919 and 1920, but coins of those denominations were also minted in silver until 1935 and 1943, respectively.

In 1947, a new issue of silver coins was struck, with the 50 centavos and 1 peso in .500 fineness and a new 5-peso coin in .900 fineness. A portrait of JosMar­a Morelos appeared on the 1 peso and this was to remain a feature of the 1-peso coin until its demise. The silver content of this series was 5.4 g to the peso. This was reduced to 4 g in 1950, when .300 fineness 25 and 50-centavo and 1-peso coins were minted alongside .720 fineness 5 pesos. A new portrait of Morelos appeared on the 1 peso, with Cuauhtemoc on the 50 centavos and Miguel Hidalgo on the 5 pesos. No reference was made to the silver content except on the 5 pesos.

In 1955, bronze 50 centavos were introduced, along with smaller 5-peso coins and a new 10-peso coin. In 1957, new 1-peso coins were issued in .100 silver. This series contained 1.6 g of silver per peso. A special 1 peso was minted in 1957 to commemorate Benito Juarez and the constitution of 1857. These were the last silver pesos. The 5-peso coin now weighed 18 grams and was still 0.720 silver; the 10-peso coin weighed 28 grams and was in 0.900 silver.

Between 1960 and 1971, a new coinage was introduced, consisting of brass 1 and 5 centavos, cupro-nickel 10, 25 and 50 centavos, 1, 5 and 10 pesos and silver 25 pesos (only issued 1972). In 1977, silver 100 pesos were issued for circulation. In 1980, smaller 5-peso coins were introduced alongside 20 pesos and (from 1982) 50 pesos in cupro-nickel. Between 1978 and 1982, the sizes of the coins for 20 centavos and above were reduced. Base metal 100, 200, 500 ,1000 and 5000-peso coins were introduced between 1984 and 1988.

Inflation and Devaluation: The peso was trading at about $12.5 MXP to $1 USD, when in the late 1980's, it began a period of hyperinflation due to rapid government printing of paper money, mostly to finance social programs. The hyperinflation created economic chaos within the country and led to continual devaluations of the currency in the global markets. The peso devalued from 12.5 to about 3000 pesos for $1 USD in a few years. In 1993, Mexican government under Carlos Salinas de Gortari lopped off the three zeros, creating the Nuevo Peso (New Peso, MXN) at about MXN 3 $1 USD. The peso has continued to inflate/devalue from that MXN 3 to $1 USD, to about MXN 13 for USD $1 (early 2010). The peso thus appears to have been holding its value over the last 25 years (an apparent change of only 12.5 to 13 for $1 USD); when in reality, it has devalued by over 10,000 percent. As of early 2010, the Mexican government continues to fight a slowly losing battle against inflation as the peso continues to inch up against the USD. (In 2009 alone, it went from 10 to 1 to 12 to 1.)

Nuevo peso
As noted above, the nuevo peso (new peso) was the result of hyperinflation in Mexico. In 1993, Presidente Carlos Salinas de Gortari stripped three zeros from the peso, creating a parity of $1 New Peso for $1000 of the old ones.

The transition was done both by having the people trade in their old notes, and by removing the old notes from circulation at the banks,over a period of three years from January 1, 1993 to January 1, 1996. At that time, the word "nuevo" was removed from all new currency being printed and the "nuevo" notes were retired from circulation, thus returning the currency and the notes to be denominated just "peso" again.

Confusion was avoided by making the "nuevo peso" currency almost identical to the old "peso". Both of them circulated at the same time, while all currency that only said "peso" was removed from circulation. The Banco de Mexico (Bank of Mexico) then issued new currency with new graphics, also under the "nuevo peso". These were followed in due course by the current, almost identical, "peso" currency without the word "nuevo".

In 1993, coins of the new currency (dated 1992) were issued in denominations of 5, 10, 20 and 50 centavos, 1, 2, 5, 10, 20 and 50 nuevos pesos. The 5 and 10 centavos were minted in stainless steel and the 20 and 50 centavos in aluminium bronze. The nuevo peso denominations were bimetallic, with the 1, 2 and 5 nuevos pesos having aluminium bronze centres and stainless steel rings, and the 10, 20 and 50 nuevos pesos having .925 silver centers and aluminium bronze rings. In 1996, the word nuevo(s) was removed from the coins. New 10 pesos were introduced with base metal replacing the silver centre. The 20 and 50-peso coins are the only currently circulating coinage in the world to contain any silver.

In 2003 the Bank of Mexico began the gradual launch of a new series of bimetallic $100 coins. These number 32 -one for each of the nation's 31 states, plus the Federal District. While the obverse of these coins bears the traditional Coat of arms of Mexico, their reverses show the individual coats of arms of the component states. The first states to be celebrated in this fashion were Zacatecas, Yucatan, Veracruz, and Tlaxcala. In circulation they are extraordinarily rare, but their novelty value offsets the unease most users feel at having such a large amount of money in a single coin. Although the Bank has tried to encourage users to collect full sets of these coins, issuing special display folders for the purpose, the high cost involved has worked against them. Bullion versions of these coins are also available, with the outer ring made of gold, instead of an aluminium bronze.

The coins commonly encountered in circulation have face values of 50¢, $1, $2, $5, $10, and $20. The $50, 10¢ and 5¢ coins are rarely seen and largely disliked by users. The $20 coin is not widely used as the $20 banknote. As of late 2006 and early 2007, the usage of 20¢ coins is also gradually declining. Small commodities are priced in multiples of 10¢, but stores may choose to round the total prices to 50¢. There is also a trend for supermarkets to ask customers to donate those cents to charities so that they can round the amount to 50¢ or 1 peso.

Banknotes
First peso
The first banknotes issued by the Mexican state were produced in 1823 by Emperor Iturbide in denominations of 1, 2 and 10 pesos. Similar issues were made by the republican government later the same year. Ten-peso notes were also issued by Emperor Maximilian in 1866 but, until the 1920s, banknote production lay entirely in the hands of private banks and local authorities.

In 1920, the Monetary Commission (Comision Monetaria) issued 50-centavo and 1-peso note whilst the Bank of Mexico issued 2-peso notes. From 1925, the Bank issued notes for 5, 10, 20, 50 and 100 pesos, with 500 and 1000 pesos following in 1931. From 1935, the Bank also issued 1-peso notes and, from 1943, 10,000 pesos.

Production of 1-peso notes ceased in 1962, followed by 5 pesos in 1971, 10 and 20 pesos in 1977, 50 pesos in 1984, 100 pesos in 1985, 500 pesos in 1987 and 1,000 pesos in 1988. 5,000-peso notes were introduced in 1981, followed by 2,000 pesos in 1983, 20,000 pesos in 1985, 50,000 pesos in 1986 and 100,000 pesos in 1988.

Second peso
Series B and C
In 1993, notes were introduced in the new currency for 10, 20, 50, and 100 nuevos pesos. These notes are designated series B by the Bank. (It is important to note that this series designation is not the 1 or 2 letter series label printed on the banknotes themselves.) All were printed with the date 31 July 1992. The designs were carried over from the corresponding notes of the old peso.

In October 1994, Series C was issued with brand new designs. The word "nuevos" remained. And 500 nuevos pesos were added. All were printed with the date 10 December 1993.

Series D
The next series of banknotes, designated series D, was introduced in 1996. It is a modified version of series C with the word "nuevos" dropped, the bank title changed from "El Banco de Mexico" to "Banco de Mexico" and the clause "pagara a la vista al portador" removed. There are several printed dates for each denomination. In 2000, a commemorative series was issued which was like series D except for the additional text "75 aniversario 1925-2000" under the bank title. It refers to the 75th anniversary of the Bank. While series D includes the $10 note and is still legal tender, they are no longer printed, seldom seen, and the coin is more common. $10 notes are rarely found in circulation.

Starting from 2001, each denomination in the series was upgraded gradually. On October 15, 2001, in an effort to combat counterfeiting, Series D notes of 50 pesos and above were further modified with the addition of an iridescent strip. On notes of 100 pesos and above, the denomination is printed in color-shifting ink in the top right corner. On September 30, 2002 a new $20 note was introduced. The new $20 is printed on longer-lasting polymer plastic rather than paper. A new $1000 note was issued on November 15, 2004. The Bank of Mexico refers to the $20, $50, and $1000 notes during this wave of change as "series D1".

On April 5, 2004 the Chamber of Deputies approved a measure to demand that the Banco de Mexico produce by January 1, 2006 notes and coins that are identifiable by the blind population (estimated at more than 750,000 visually impaired citizens, including 250,000 that are completely blind).

On December 19, 2005, $100, $200, and $500 MXN banknotes include raised, tactile patterns (like Braille), meant to make them distinguishable for people with vision incapacities. This system has been questioned and many demand that it be replaced by actual Braille so it can be used by foreigners not used to these symbols. The Banco de Mexico, however, says they will continue issuing the symbol bills.

Series F
In September 2006, it was announced that a new family of banknotes will be launched gradually. The 50-peso denomination in polymer was launched in November 2006. The 20-peso note was launched in August 2007. The 1000-peso note was launched in March 2008. The $200 was launched in 2008, and the $100 and $500 notes will be launched in the summer of 2009. This family is the F Series.

Commemorative Bills
On September 29, 2009, The Bank of Mexico unveiled its Commemorative Banknotes. The 100-peso denomination bill commemorates the centennial of the Beginning of the Mexican Revolution (1910-1920). The 200-peso denomination bill commemorates the bicentennial of the start of the Mexican War for Independence which began in 1810.

100 Peso Banknote:
Printed on polymer with the dimensions of 66 mm in length, and 134 mm in width. The front of the banknote depicts a locomotive, which was used to transport revolutionary troops, this symbolizes the armed movement that began in 1910. In the reverse side of the banknote there is a segment a mural titled "Del Porfirismo a la Revolucion", also known as, "La Revolucion contra la dictadura Porfiriana", which was painted by the artist David Alfaro Siqueiros. The Bank of Mexico printed 50 million 100-peso banknotes.

There was a printing error in this banknotes, in the small letters (almost unnoticeable, as they are very small and the same collor as the waving lines), near the top right corner, just above the transparent corn, from the side of the "La Revolucion contra la dictadura Porfiriana", it is written: "Sufragio electivo no reeleccion", this supposed to be a quote to Francisco I. Madero's famous phrase, but he said "Sufragio efectivo no reeleccion". The President Felipe Calderon made a news paper announcement in which he apologized for this, and said that the notes were going to continue in circulation, and that they would retain their value.

200 Peso Banknote:
The 200-peso denomination bill commemorates the bicentennial of the Beginning of the Mexican Independence (1810-1821). This paper banknote is printed in a vertical orientation with dimensions of 66 mm in length and 141 mm in width. The obverse of the banknote depicts the Mexican Leader of Independence, Don Miguel Hidalgo y Costilla, carrying his banner that was later used by the independence fighters. The reverse depicts the iconic monument the "angel de la Independencia" which is located in Mexico City on the Paseo de la Reforma.

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