The Mexican peso has registered a strong appreciation of 4.7% so far in 2023 reaching a price of $17.85 pesos per dollar on May 24, thus continuing its good streak against the US currency.

On the other hand, the Governing Board of Banco de México in its last monetary policy meeting in mid-May decided to maintain the target for the Overnight Interbank Interest Rate at 11.25%. World growth prospects for 2023 continue to anticipate a slowdown , where the global risks of inflationary pressures, the worsening of geopolitical tensions along with more demanding financial conditions still remain.

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With this scenario, the strength of the Mexican currency could be explained by a set of factors, among which are the increase in remittances arriving in the country from abroad, the inflow of foreign direct investment due to the relocation of companies, the restrictive monetary policy applied by the Bank of Mexico and the increase in income from tourism.

A strong peso can benefit the sectors of the economy that depend more on imports, however it could affect the performance of investment trusts or fibras that have a significant proportion of their income in dollars, which would directly affect their income projections . On the other hand, those real estate trusts that maintain debts in dollars would benefit.

The conformation of the portfolios and the types of assets that comprise it also affect their performance. For example, structured portfolios exclusively from the industrial sector will take advantage of the increases in demand generated mainly on the Mexican border, where vacancies have reached historical lows.

For example, Fibra Mty, which successfully carried out the sale and purchase operation for the Zeus industrial portfolio, made up of 46 industrial buildings located in 11 national markets, was able to double its size, allowing it to increase the defensive characteristics of the trust portfolio by increasing the percentage of dollarized income and extend the maturity profile.

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As indicated in its income statement for 1Q 2023, the unfavorable exchange effect due to the depreciation of the dollar against the peso was almost entirely offset by the contractual increases in rental prices and by the 3 days of operation of the Zeus portfolio in Fibra Mty which caused them to remain aligned with the results of the same period in 2022.

In principle, the portfolios with the greatest exposure to dollarized income see their potential income affected if they do not have contractual adjustments that allow them to absorb the impact.

Various financial analysts coincide in adjusting their expectations regarding the exchange rate, pointing out that the national currency will be better positioned against its US counterpart at least until next year, which will be affecting the projected results of the Mexican fibras.