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Trump tweets Mexican Peso down

Jasper van der Gaag
First year Bachelor student Economics and Business Economics.

A group of Mexican investors have (jokingly) opted the idea that their government should buy Twitter. This may seem like a surreal trade, but the explanation makes sense. Since Donald Trump’s election as the 45th president of the United States in November of 2016, the Mexican government has spent a large portion of the national reserves on protective measurements for their national currency, the peso. The Mexican investors noticed a relation between the anti-Mexico tweets sent out by Donald Trump and the real-time value of the currency. The exchange rates took large drops for every tweet. The Mexicans said that the government would be better off buying Twitter, so they could stop Trump from tweeting, to eventually save the peso. This transaction would in the end be cheaper than all the protective measurements.

The idea that the investors came up with is very surreal. But the concept that a message no longer than 140 characters can have such influence on a nation’s currency is at least just as surreal. The first clear example of Trump’s direct influence on the Peso by updating his social media was seen on January 5th of 2017. This tweet caused the Mexican Peso to instantly drop with as much as 1.5 per cent:

 

 

 

 

 

 

On January 20th Trump got inaugurated in Washington DC. Trump’s rather alternative way of communicating before the inauguration arose the fear of even further depreciation of the Peso as soon as he would officially be named president. This turned out to be a legitimate fear when only six days later a “Twitter-feud” between Trump and Mexican president Enrique Peña Nieto caused another 1.5 per cent drop of the exchange rate of the Peso. A day before the scheduled meeting to discuss the construction of the infamous wall Trump is planning to build on the US-Mexican border, the man himself sent out the following tweets:

trump tweet 3Trump tweet 2

 

 

 

To which Nieto responded by tweeting the following:

trump tweet 4

Translation: “This morning we have informed the White House that I will not attend the scheduled work meeting for next Tuesday with @POTUS”

Currently the value of the Peso is at an all-time low, being worth less than 5 dollar cents. Since Trump’s election it has lost 13 per cent of its value. The depreciation of the peso will undoubtedly have a negative effect on the Mexican economy. The World Bank has even adjusted her prognosis for Mexico’s economic growth for 2017, lowering it from 2.8 per cent to 1.8 per cent.

The downfall of the Mexican economy has already resulted in Mexicans rioting and looting throughout the entire country. The joking proposal to make the Mexican government buy Twitter can therefore be considered a moderate reaction to Trump’s anti-Mexico policy. However, the fact that the idea arose in the first place displays the frustration amongst the Mexicans. The downfall of their economy and the depreciation of their life savings are majorly caused by one man sending out brief messages from his smartphone, and there is nothing they can do about it.

 

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