MEXICO CITY — Business picked up suddenly Thursday at the Joyeria Michi, a jewelry outlet in the Zona Rosa, Mexico City's famed tourist entertainment quarter.
There were two reasons: The Mexican peso had fallen sharply in value against the dollar, and Maria de la Luz Mendez, the clerk at the shop, had yet to raise peso prices to reflect the change because she had not heard from the store's absentee owner.
As a result, pendants that had cost the equivalent of $5 until Wednesday could be had for only $3 worth of pesos Thursday.
"We haven't changed prices yet because the owner is not in town, but I expect him to call any minute," Mendez said. "Before yesterday, I hadn't sold anything for a week. But now sales are brisk."
The sudden fall in the value of Mexico's currency this week had mixed effects on the streets of Mexico City. It was a boon for foreign tourists spending dollars. It also helped elevate the Mexican stock exchange as Mexican investors looked for something other than dollars in which to invest.
But the devaluation proved a mixed blessing for Mexican travel agents and a nuisance for storekeepers trying to adjust prices to keep up with changing exchange rates.
Mexicans who planned to travel abroad were also reconsidering their trips.
There was no apparent panic buying. The city has become accustomed to devaluations, even sudden ones. The peso has been losing value against the dollar for more than six years.
The worth of the peso as measured against the U.S. dollar went to a dollar to levels of up to 2,700 Thursday from about 1,700 early Wednesday. So while it was more expensive to buy dollars, pesos could be had at bargain-basement prices--and so could goods priced in pesos.
For example, an enchilada lunch at Shirley's Restaurant on Reforma Boulevard costs 3,700 pesos. On Tuesday, a tourist needed to exchange $2.17 into pesos to enjoy the enchiladas. On Thursday, one needed to spend only $1.48.
"The devaluation helps Americans in everything from food to shopping," said Joseph Allen, a tourist from Utah. "A lot of people in our group have been buying jewelry. We're a little more motivated."
As a result, tourists were in a race with shopkeepers to buy goods--especially gold and silver--before the merchants could change prices. Late Wednesday evening, workers at the Sanborn chain of restaurant stores were changing prices on displays of silver. But some merchants were befuddled by the quickly changing rates of exchange.
"Yesterday, we changed prices four times," said Armando Rellstab, a harried clerk at Joyeria Taxco, another retail silver outlet. "Now, I'm going to have to change them again."
Even restaurants were considering price changes on their menus. "We're studying the idea right now," said Concepcion Meneses, an employee at Loredo, a Mexican restaurant in the Zona Rosa.
The Mexican stock exchange, after weeks of steep declines, rebounded for the second day in a row. It has regained about half of the losses sustained since mid-October, when markets worldwide crashed, and the government immediately seized on the recovery as a sign of confidence.
"Now that dollars are expensive, people see the virtue in buying stocks, especially since they are bargains right now," said presidential spokesman Manuel Alonso.
Travel agents reported no immediate surge in reservations from abroad, although they said they expect an eventual increase. For American tourists, Mexico is one of the few places where the dollar is not losing value.
"It's beneficial for us, especially at this time of year, because it's right before the peak season," said Samuel Cabral, an employee at the American Express Travel Agency in Mexico City.
Mexicans Reconsider Travel
However, the travel agents fretted that Mexicans would cancel trips abroad because of the high cost of buying dollars. "I've heard comments from some agents that there are a lot of cancellations," said Socorro Gonzalez, an operations manager for Polvani Tours. "I think the crunch will come next week."
Travel agents unanimously predicted that tourism by Mexicans within the country would increase, somewhat offsetting lost sales for travel abroad.
The surprise devaluation took one woman by surprise and she immediately began to consider canceling a family Christmas vacation in Texas. "We had been buying dollars little by little, but now there's no way," she said. "We might not be able to go on our trip."
It was difficult to find dollars for sale Thursday, although activity was rather light. Some exchange houses were empty at midday and there was no visible sign of desperate quests for dollars. Only newspaper headlines were panicky.
"The Dollar to 3,000!" screamed one.
One dollar trader on tree-shaded Reforma Boulevard explained the lack of action, saying: "People with dollars are hoarding them to see how high the prices go, and people who need dollars are waiting until things settle down."