Mexico City.- The Mexican peso fell on Monday in the face of a global rise in the dollar, resuming a negative streak that prevailed last week amid growing concerns about the potential impact of a series of controversial constitutional reforms promoted by the government.
The exchange rate was trading at around 19.36 pesos per dollar on the international market (Forex), with a 1.34 percent drop for the Mexican currency, the worst performance of the day among a basket of global currencies.
The National Electoral Institute (INE) confirmed on Friday, after business closed, that Morena and its allies will have a large majority in the next Congress, paving the way for a quick approval of constitutional changes, including the controversial reform of the justice system. Other amendments include eliminating autonomous bodies and reforming the electoral referee so that its counselors are elected by popular vote and plurinominal deputies disappear.
On Friday, the peso had rebounded 2.2 percent after four consecutive sessions of losses.
“Today, the exchange rate is showing upward fluctuations due to the nervousness caused by the process of drafting the reform to the Judicial Branch, after considering the confirmation of the supermajority of some parties in the Chamber of Deputies,” Monex Grupo Financiero said in a report. Over the weekend, the pro-government senator Ricardo Monreal said that the changes to the justice system would be debated in Congress starting on Sunday, when the next legislature will begin to meet. The opinion of the proposal is expected to begin to be analyzed on Monday by a commission of deputies. Investors are also concerned by a worsening of geopolitical tensions in the Middle East, after Hezbollah launched hundreds of rockets and drones against Israel on Sunday, while the Israeli army reported that it had attacked Lebanon. The benchmark S&P/BMV IPC stock index fell 0.46 percent to 53,243.16 points, erasing its opening gains, which it had earlier risen 0.45 percent. Shares of the Alfa conglomerate led the losses, with a fall of 3.20 percent, followed by shares of Grupo Carso, which includes part of Carlos Slim’s businesses, which fell 2.99 percent.
With information from Reuters
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