Peso depreciates due to nervousness over reform of the Judiciary, analysts warn

MEXICO CITY (apro).- There is nervousness in the financial markets and investors after the elections of June 2 and the recent statements by Ignacio Mier, Claudia Sheinbaum and President Andrés Manuel López Obrador, regarding the reforms that are being carried out. They intend to approve this September, particularly that of the Judiciary.

The virtual president Claudia Sheinbaum and the president of Mexico, Andrés Manuel López Obrador, have reiterated the progress of the reform of the Judiciary before the change of government, which has only continued to increase the depreciation of the peso, due to the anxiety of the financial markets and investors.

This political scenario is the cause of the negative trend on the Mexican currency, said Priscila Robledo, chief economist at Fintual, according to “El Financiero”.

This week began with the national currency falling 18.65 units against the dollar. The peso has plummeted to 9% since election day. Yesterday the exchange rate at the close of the day was 18.4879, according to information from the Bank of Mexico.

“The depreciation of the Mexican peso is due to risk aversion to Mexico (…) In particular, the reform of the Judicial Branch is of concern, since in addition to the fact that the Judicial Branch is the only remaining counterweight to the Executive Branch, it is also essential to provide certainty legal in the private sector, which could inhibit the growth of fixed investment and the arrival of new foreign direct investment,” explained Gabriela Siller, director of Economic Analysis at Grupo Financiero BASE.

The deputy director of economic analysis at CI Banco, James Salazar, said that the concern comes from the fact that Morena could approve all of its proposals, although he noted that this mainly concerns the Mexican investor, more than the foreigner, who manages the investment funds in the country. outside, according to the same media.

“Politics had not been at the center of discussion in a long time, now, the surprise of the power that Morena may have in the chambers makes the market nervous, because it does not like absolute power, not necessarily of this government but of anyone, because counterweights are always better,” Luis Gonzali, investment director at Franklin Templeton Mexico, told “El Financiero.”

Yesterday, Sheinbaum said that there will be consultation and dialogue with citizens regarding the initiative. The Morenista also tried to calm things down: “national and foreign investors have nothing to worry about, their investments are safe in Mexico (…) they have no reason to be concerned about a reform in the judiciary,” she said yesterday at a conference press.