The MND Peso Index™ for May 2026

MND Intelligence · Second edition

Welcome to the second edition of the MND Peso Index™, part of the MND Intelligence™ suite of data products developed by Mexico News Daily.

The MND Peso Index™ is a monthly purchasing power parity measure that assesses whether the Mexican peso is overvalued or undervalued against the US dollar by comparing the prices of a standardized basket of 20 goods and services in Mexico and Dallas, Texas

Our headline finding for May 2026 indicates that the peso was overvalued by just over 4% against the dollar, an increase of more than one percentage point from the 2.83% overvaluation we determined in April.

Before we delve into the May result, we would like to further explain the MND Peso Index™ to our readers, dozens of whom commented on the inaugural edition.

The purpose of the MND Peso Index™, the makeup of the basket and more

• The purpose of the MND Peso Index™ is to make an assessment — based on actual prices rather than financial market signals — on whether the Mexican peso is overvalued or undervalued against the US dollar.
• The MND Peso Index™ is not a “Cost of Living” index that looks at price differences between Mexico and the United States. Its purpose is NOT to assess whether Mexico is a cheap or expensive country to live in relative to the U.S.
• Assessing and predicting exchange rates is not an exact science. The monthly assessment the MND Peso Index™ makes on whether the Mexican peso is undervalued or overvalued against the US dollar is intended to give you a real-world perspective on what the exchange rate would be if it reflected the rate at which each currency can buy the same goods and services at the same price in its own country. A simpler way of saying that is this: the implied rate derived from the index basket indicates what the real USD:MXN rate “should be.”
• As an independent check on our methodology, we consulted John Doyle, CEO of Monex USA, whose team conducted a review of the MND Peso Index™ and validated our approach. Doyle told us that Monex is forecasting an end-of-year USD:MXN exchange rate of 17.90 — a rate that is close to the implied rates our index basket yielded in both April (17.85) and May (18.02).
• The basket of 20 products and services was not formulated to represent a typical shopping list. It was specifically designed to include a wide variety of identical or near-identical goods and services that are available in both the United States and Mexico in order to produce a broadly representative implied exchange rate.
• The identical or near-identical products and services included in the basket are available on both sides of the border. Exact comparisons were facilitated by the presence of U.S. chains in Mexico, such as Costco, Walmart and Starbucks.
• For the latest MND Peso Index™, we removed two digital subscription services that were included in the April basket: Spotify Premium and Microsoft 365 Personal. Those two items were replaced with a food staple — a 12-piece packet of Great Value flour tortillas — and a physical fitness service: a Planet Fitness membership. In making the changes we took into account feedback we received from readers. We also decided to keep the garden hose in the basket. It was selected as a seasonal item in April, but will remain in the basket as a permanent item for the foreseeable future.

• The Mexico prices used in the index include IVA (Mexico’s value-added tax), while Dallas prices are pre-tax shelf prices. Dallas was chosen as our U.S. benchmark because it offers a more representative snapshot of everyday pricing in the United States than higher-cost coastal cities. Although our U.S. prices were collected in Dallas, the MND Peso Index™ is ultimately assessing the comparative value of a currency used across the United States — not just in Texas. U.S. sales taxes vary widely by state, city and even product category, meaning readers from Texas, California, Florida or Oregon would each face a different effective price for the same item. Including sales taxes for U.S. products would therefore introduce inconsistency and distortion rather than clarity. Since IVA is inseparable from what consumers pay in Mexico, we opted for shelf prices on both sides of the border — a consistent approach that keeps the index clean, comparable and relevant to U.S. readers regardless of where they are from.
• The MND Peso Index™ derives an implied exchange rate for each of the 20 basket items by dividing its Mexico price in pesos by its Dallas price in dollars, yielding the rate at which both prices would be equal. The simple average of those 20 implied rates is the MND Peso Rate. Comparing the MND Peso Rate to the Banxico FIX rate on the date the prices were collected reveals the degree of overvaluation or undervaluation of the Mexican peso relative to the US dollar.
• We explained our rationale for developing the MND Peso Index™ in our introductory article last month. Click here to read it.

What did the MND Peso Index™ tell us in May 2026?

In May 2026, the MND Peso Index™ suggests that the USD:MXN exchange rate on the date we collected prices in various Mexican cities and in Dallas, Texas, overvalued the Mexican peso by just over 4%.

The Mexican and Dallas prices were collected on May 26, 2026. The mean implied exchange rate across all 20 items — the MND Peso Rate — came in at 18.02 pesos per dollar, whereas the Banxico FIX rate on May 26 was 17.32 pesos per dollar.

The gap between those two figures indicates that the peso — at a rate of 17.32 to the US dollar — was overvalued by 4.03% in late May 2026.

In other words, the USD:MXN exchange rate — if it reflected the rate at which the peso could buy the basket’s goods and services in Mexico at the same dollar prices as in the United States — would be 18.02.

In the table above, you can see the Mexico and U.S. prices for all 20 goods and services in the basket, the total costs of the two baskets, the implied exchange rate for each item, the MND Peso Rate (ie. the overall implied rate), the Banxico FIX rate on the date prices were collected and the overvaluation/undervaluation assessment for the peso.

Why did the peso’s ‘overvalued’ assessment increase between April and May? 

In simple terms, the MND Peso Index™ overvaluation assessment for the Mexican peso was 1.2 percentage points higher in May (4.03%) than in April (2.83%) because the gap between the MND Peso Rate and the official Banxico rate widened to 70 centavos from 49 centavos a month earlier.

Here is a more detailed explanation of what happened: 

The MND Peso Rate edged up from 17.85 in April to 18.02 in May, reflecting a shift in the implied exchange rate across the basket of goods and services. At the same time, the Banxico FIX rate slipped slightly — from 17.36 to 17.32 — as the peso marginally strengthened against the dollar. The combination of a higher MND Peso Rate and a lower Banxico rate widened the gap between the two, pushing the overvaluation reading from 2.83% to 4.03%.

We acknowledge that a direct month-on-month comparison is not possible between April and May, as two items from the April basket — Spotify Premium and Microsoft 365 Personal subscriptions — were replaced with Great Value flour tortillas and a Planet Fitness membership. The removal of two items from the basket and the introduction of two others in their place inevitably had some effect on the MND Peso Rate, as different items yield different implied exchange rates.

We read each and every one of the more than 50 comments we received on our MND Peso Index™ article for April. We once again look forward to your feedback.

The MND Peso Index™ result for June will be published in early July.

* Price sources: Mexico prices were collected from the websites and apps of Walmart México, Costco México, AutoZone México, Telmex, Cinépolis, Petco México, and the Mexican outlets of McDonald’s, Starbucks, Netflix and Planet Fitness. Dallas prices were collected from their U.S. equivalents. The Banxico FIX rate of 17.32 published on May 26, 2026 was used as the official exchange rate reference.

Mexico News Daily