By Anthony Harrup
MEXICO CITY--Mexican stocks fell in 2022 for the first time in four years, while the peso strengthened against the U.S. dollar supported by record exports and remittances and rising interest rates.
The benchmark IPC index fell 2.1% Friday to 48463 points and was down 9% from the end of 2021 in its first full-year decline since 2018. The index posted a record-high close of 56609 on April 1 of this year.
Among the year's top gainers were retailer Grupo Comercial Chedraui, whose shares rose 96%, and bakeries giant Grupo Bimbo, which advanced 31%. Bellwether America Movil shares ended the year down 18% and Cemex shares fell 44%.
The peso traded between 19.04 and 21.47 to the dollar and ended the year at 19.49, putting it among the best-performing currencies against the dollar with a 5.2% gain.
The peso was backed by record exports and remittances from Mexicans living in the U.S., solid foreign direct investment, and the Bank of Mexico raising interest rates, said Gabriela Siller, head of analysis at Banco Base.
"For 2023 it's estimated the peso will continue to be favored by export, remittance and foreign direct investment flows," Ms. Siller said in a report. "However, flows are expected to decelerate with the economic slowdown or a light recession in the U.S."
Mexico's economy performed better than expected in 2022, with gross domestic product seen ending the year up 3% according to the central bank's latest survey of private economists. Economic growth is expected to slow in 2023 and inflation is projected to ease from 7.77% in mid-December.
The Bank of Mexico raised its overnight interest-rate target eight times this year to reach 10.5% in December. The bank is expected to raise the rate by a quarter of a percentage point in February in what could be the last increase of the cycle begun in mid-2021.
Write to Anthony Harrup at anthony.harrup@wsj.com
(END) Dow Jones Newswires
12-30-22 1700ET
