The Mexican currency has finally had a truce after the bad streak it has gone through in recent weeks. The Mexican peso is around 18.2467 units per dollar at noon this Friday after it was learned that the Secretary of the Treasury of Mexico, Rogelio Ramírez de la O, met this week in London with groups of investors to calm the spirits and concerns that has generated the reform of the Judicial Branch promoted by the current president, Andrés Manuel López Obrador, and which means that both judges and ministers are elected by popular vote.
The Mexican currency recently reached 19 units per dollar, which represented a depreciation of up to 1.76%, the deepest since March 2020 when the Covid pandemic shook the markets. The nervousness of financial groups was unleashed when, after the presidential election on June 2, President López Obrador reiterated his interest in having his reforms approved even in the next Government, specifically the reform of the Judicial Branch.
The peso’s appeal is due to the fact that it trades 24 hours a day, five days a week, all over the world. Its average daily turnover is equivalent to 114 billion dollars, according to data from the Bank for International Settlements (BIS), more than any other emerging market currency (with the exception of the Chinese currency). This liquidity makes it Wall Street’s favorite for betting on markets other than Mexico.
In accordance with BloombergRamírez de la O, who will hold the same position in Claudia Sheinbaum’s government starting October 1, assured investors in London that the future president “will moderate the impact of judicial reform” due to concerns that the changes to the Constitution will affect institutions and this in turn will drive away foreign direct investment from the country, an area that in 2023 alone reached a new historical record: 36,058 million dollars, according to the Ministry of Economy.
In these meetings, according to the sources consulted by BloombergRamírez de la O pointed out that one of the country’s financial objectives in 2025 will be to reduce the budget deficit of the Gross Domestic Product (GDP) to 3%, which at the end of this year will close at 5%, its highest level since 1998.
Part of the nervousness of the markets consists, according to specialists consulted by EL PAÍS, in the fact that the future president Claudia Sheinbaum has not distanced herself from the current Administration. “The president-elect has not distanced herself from López Obrador either, so the next Government could begin to be seen as a continuation of the current Government, which fuels nervousness,” explains Gabriela Siller, director of the consultancy Analysis.
Regarding the discussion of the reform of the judiciary, Congress has called eight public forums and 32 national assemblies on aspects of the initiative to analyze and discuss it in an open parliament. The first of the forums, with the theme “What Judicial Power do we have? What Judicial Power do we want?”, was attended by the 11 justices of the Supreme Court.
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