An Estimation of the Mexican Peso´s Overvaluation for 2023

We estimate the overvaluation of Mexican peso for second quarter and June 2023. The equilibrium real exchange rate is approximated by reestimating a cointegration equation where variable interest depends on Mexico's GDP, US Industrial Production Index, sum private consumption, government consumption exports Mexico, fixed investment. use these variables to approximate relative supply demand two countries. Under certain assumptions, we that overvalued 13.7% 15.3% in 2023, respectively, with information available as mid-July same year. provide an nominal compatible elimination misalignment, if this were only one adjusts.