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He Mexican peso, which had been resilient to the economic effects of the Covid and the close sighting of a slowdown in the United States, began to burst with the political and economic uncertainty that warns the judicial reform.
Carlos Lopez Jones, Financial analyst from the Tendencias platform projected that the currency could reach 22 units per dollar if the progress of these constitutional changes does not please the markets.
He explained that volatility in the following days will depend mainly on the reform of the Judiciary: “If approved, we will probably see an exchange rate of 21 and perhaps even 22 pesos per dollar in a few days.”
Lopez Jones He estimated that these proposed changes to the justice system “have put Mexico in the world’s sights and there are global investment funds that have already sold their positions in pesos, until they know what might happen in the country.”
He added that the great concern for investment and entrepreneurs is that if this reform is implemented, the next step will be the disappearance of autonomous bodies such as the Federal Competition Commission (Cofece), the Federal Institute of Telecommunications (IFT), the Energy Regulatory Commission (CRE) and the National Hydrocarbons Commission (CNH), inter alia.
“These changes contravene the USMCA and could lead to controversies in which Mexico will lose, which will result in severe economic sanctions.”
In this regard, Janneth Quiroz, Director of economic analysis at Grupo Financiero Monex, anticipated that these days the pressure on the exchange rate will cause it to operate above 20 pesos per dollar. Quiroz pointed out that there is a strong uncertainty in the markets due to what will happen in the country with the approval of the reform to the Judicial Branch, but there is also nervousness because there are already signs of a decline in activity in the United States.
Adding to the nervousness is the presidential debate between the American presidential candidates. Kamala Harris y Donald Trump who came face to face last night.
“The US is slowing down faster than expected and these two factors will prevent the superweight from falling again,” he insisted.
The economist stated that since the Last August 29th, Although there is stability in the peso, its levels have shown an upward trend, touching 20 units.
He projected that markets are waiting to see what types of events, both political and economic will be recorded with these reformsThis caution, he explained, is forming a next wave in a high range for the currency and we expect this depreciation process to boost the peso even further.
Meanwhile, Base Bank revised changes to its economic outlook as changes to the justice system in Mexico advance, as they expect an impact of up to 1.9% Gross domestic product of the country in damages due to the temporary or indefinite postponement of new investments that were planned to arrive in Mexico in the short term.
Jesús López, deputy director of analysis at the financial institution, added that a decrease in the reinvestment of profits by foreign companies in the country is also expected.
Base warned that these changes could lead the Mexican economy into an economic recession by the end of 2024 and then face severe stagnation.
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2024-09-17 09:23:57