The nervousness generated in the markets by the progress of the reform to Judiciary in Mexico fell like kryptonite for the Mexican peso, which brought it close to 19.80 units per dollar, a figure not seen in several months, he commented. Gabriela Siller Pagazadirector of financial analysis of Base Bank.
The superweight touched the 19.78 at times with a depreciation of 1.63% or 31.6 centsopening the day with minimums of 19.3523.
Our currency was the most depreciated among the main crosses against the dollar.
“This shows that the upward pressures on the exchange rate are due to internal risks and makes it very likely that it will soon exceed the psychological level of 20 pesos per dollar,” he said. Siller.
He stressed that the approval of the opinion of the reform to the Judicial Branch the day before yesterday puts at risk the political and commercial relationship with USA y Canada Following the agreements signed in the Free Trade Agreement (T-MEC) and while the president Andres Manuel Lopez Obrador announced a pause in relations with the embassies of both countries amid his anger over the warnings they issued regarding these constitutional changes.
Siller Pagaza, director of the Business School of the Tecnológico de Monterrey, said that if these changes are made, judicial system, an immediate impact on Mexico’s economy will be seen.
“In fact, it is estimated that the reform of the Judiciary will impact at least 1.9% of Mexico’s GDP, which would imply a moderate recession.”
He stated that this scenario is similar to what occurred in 2019, after the cancellation of the construction of the new airport of the Mexico City and if it materializes, “this administration (that of Claudia Sheinbaum) will have started with a recession due to the application of a economic policy and will have inherited a recession to the next administration for the same reason.
“In addition, this also puts at risk,” he said, “the credit rating of the sovereign debt from Mexico”.
The economist said that the depreciation of the last few hours has to do with internal risks, since although at this time there are international factors that move the markets, the reality is that uncertainty will bring greater weight loss.
Meanwhile, an analysis by the economist Arely Medina, from Citibanamex, revealed that within the basket of emerging currencies, the peso is the one that has depreciated the most on the day.
He noted that in the year-to-date, the Mexican peso is the third currency with the greatest losses (-12.3%), only behind the Argentine peso (-14.4%) and the Turkish lira (-13%).
Not only external factors explain the strong exchange rate depreciation. In addition to the strong depreciation observed during the day, the Price Index y Quotes The Mexican Stock Exchange saw a loss of -0.3%, a contrast to the gains seen in other stock indexes such as the S&P, Nasdaq y Dow Jones, which showed daily increases of 0.2%, 0.4% and 0.3%, respectively.
“We consider that political factors “Internal factors are increasing the perception of country risk, directly affecting the exchange rate,” he projected.
The level reached so far becomes its second highest level of the year, below the 20.05 recorded on August 5 when the local currency was impacted by the increase in interest rates. Banco Central from Japan.
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2024-09-01 22:05:32