Puerto Vallarta, Mexico – The Mexican peso continues its decline on Monday, driven by growing concerns over a controversial judicial reform that could soon be approved following the commencement of congressional sessions on Sunday. The peso was trading at 19.7399 per dollar, reflecting a 0.15% decrease from Friday’s Reuters reference price, marking the currency’s continued struggle in what has become one of its worst months since the pandemic.
The Chamber of Deputies is set to begin discussions on Tuesday regarding changes to the justice system. These changes include the proposal for the popular election of judges, magistrates, and Supreme Court ministers. The reform is expected to pass without significant opposition in both chambers of Congress, which have a large pro-government majority.
Over the weekend, a judge granted a stay to temporarily halt the debate on this controversial proposal. The proposal has sparked widespread concern, leading to a strike within the judicial sector, straining relations with the United States, and unsettling the market amid fears that the business climate in Latin America’s second-largest economy could be jeopardized.
Despite the stay, Ricardo Monreal, the leader of the Morena caucus in the House of Representatives, dismissed the resolution, assuring that the legislative analysis would proceed as planned.
The Mexican peso, once one of the strongest currencies against the U.S. dollar, has faced significant challenges since the June elections. The elections saw a sweeping victory for Morena and its allies, which opened the door for the approval of the judicial reform. Since then, the peso has lost 16% of its value, making it one of the worst-performing currencies against the dollar this year.
In contrast to the peso’s decline, the Mexican Stock Exchange saw gains in its first trading session of the week. The leading S&P/BMV index, which tracks the most traded shares in the local market, rose by 0.39% to 52,188.29 points. The day’s trading is expected to be marked by reduced liquidity due to the closure of U.S. financial markets in observance of Labor Day.
Shares of retailer Chedraui led the gains, increasing by 3.11% to 153.90 pesos. Restaurant operator Alsea also saw a rise in its stock price, climbing 1.65% to 54.80 pesos. The overall positive performance of the stock market stands in contrast to the ongoing concerns surrounding the peso and the broader economic implications of the proposed judicial reforms.
Puerto Vallarta, Mexico - The Mexican peso continues its decline on Monday, driven by growing concerns over a controversial judicial reform that could soon be approved following the commencement of congressional sessions on Sunday. The peso was trading at 19.7399 per dollar, reflecting a 0.15% decrease from Friday's Reuters reference price, marking the currency’s continued struggle in what has become one of its worst months since the pandemic.
