MEXICO CITY (apro).- The Mexican currency was the most depreciated for the second consecutive day at the close of trading on August 27, and could end up being the most depreciated this year, given the reform of the Judicial Branch.
On Monday, the national currency closed at 19.3617 units per dollar; on Tuesday, the peso closed at 19.7131 units per dollar; likewise, on Wednesday morning, the Mexican currency opened with an improvement, only to lose ground, after President López Obrador declared that he would pause diplomatic relations with the United States and Canada.
At 8 a.m., the peso was at 19.48, but by midday it had already dropped to 19.69 pesos, moving in a daily range between 19.4244 and 19.7972.
The peso has depreciated due to risk aversion resulting from President Andrés Manuel López Obrador’s reforms, especially those concerning the Judiciary. The business leaders of Canada and the United States asked their ambassadors in this country, Graeme C. Clark and Ken Salazar respectively, to warn President-elect Claudia Sheinbaum about the risks that the approval of the amendment to the T-Mec treaty and the investments they have in Mexico would entail.
The diplomats’ warnings did not please the head of the national executive, who declared that he would pause diplomatic relations with these countries, since, according to him, they intend to interfere in national sovereignty.
The president has insisted during his morning press conferences this week that the Mexican economy is strong and that “if there are changes in the exchange rate, like yesterday, for example, it has to do with external factors, it is what is happening in Japan, in the United States, nothing to do with the judiciary, as the columnists, experts, spokesmen of the Mexican oligarchy and the corrupt conservative bloc lie.”
Whether columnists and experts lie or not, the truth is that changes tend to generate uncertainty and this is reflected in the behavior of investors and international financial markets.
In the case of the reform to the Judicial Branch, it is feared that it could weaken “the Mexican legal framework, the administration of justice and the application of the T-MEC rules in the country, the commercial relationship with the United States would be put at risk and new investments from that country would be inhibited, according to Banco Base in its analysis of the economic impact of the constitutional reforms.
“This would add to a probable slowdown in the reinvestment of profits, since 40% of these come from US companies. Therefore, the economic impact of the reform of the Judicial Branch would represent at least 1.9% of the GDP,” warned the same institution.
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2024-09-03 08:08:35