All through last year, Mexico lived beyond its means. Sales abroad failed to keep pace with purchases abroad, and the government tried early this year to bring foreign trade back into balance by boosting duties on all imports 25%. When the trade deficit kept getting worse and capital showed signs of taking flight northward, officials decided that they could not wait for this summer's expected bumper cotton and coffee crops to save the situation. Last week the government abruptly announced a devaluation of the Mexican peso—from 8.65 to 12.50 to the dollar....
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