The news that Marcelo Ebrard will be Mexico’s next Secretary of Economy was received with some optimism by the financial markets. The Mexican peso appreciated 0.3% against the dollar moments after the president-elect, Claudia Sheinbaum, announced that the former Chancellor would take the reins of the economic portfolio. Around noon on Thursday, the exchange rate is trading at 18.31 per dollar.
The peso fell sharply following the results of the elections on June 2 due to the possibility that a Congress with a majority for the ruling party could lead to the elimination of democratic counterweights. A proposal to reform the judiciary so that judges and magistrates are elected by popular vote generated nervousness among investors. Sheinbaum’s party, Morena, is also seeking to pass legislation to eliminate autonomous bodies, including regulators and the electoral institution. Since election day, the peso has lost 8.3% of its value against the dollar.
The Ministry of Economy primarily manages the foreign trade portfolio and Mexico is one of the countries that has the most free trade agreements with countries in the rest of the world. As Foreign Minister under López Obrador, Ebrard served as an interlocutor between US trade authorities during the presidency of Donald Trump. The markets reacted with slight optimism to the appointment because it was already expected and because Ebrard is an already known figure. Sheinbuam takes power on October 1, the date on which the current Secretary of Economy, Raquel Buenrostro, will leave. Ebrard is perceived by the markets as a politician with better ties to the private sector than Buenrostro.
In his speech on Thursday, Ebrard spoke of “the new reality” he will face. “We live in a more protectionist world, to a certain extent more unstable, and the task is to overcome these stormy waters with everything we have learned in our lives. To be successful and fulfill the mandate of the people of Mexico,” he told the podium as part of the event that took place at the Interactive Museum of Economy (MIDE) in Mexico City.
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