Experts attributed the losses in part to a greater perception of local risk due to López Obrador’s electricity sector reform project, which the Federal Economic Competition Commission has criticized.
MEXICO CITY (El Economista) – The Mexican peso fell sharply against the dollar in Tuesday’s trading. The exchange rate ended the day at the level of 20.1700 pesos per greenback against a close of 19.9530 units yesterday, according to data from the Bank of Mexico (Banxico).
The exchange rate movement meant a drop of 27.10 cents for the local currency, equivalent to a variation of 1.09 percent—the cross-moved in a range with a maximum of 20.2485 units and a minimum of 19.9219 units.
The dollar strengthened during the day as liquidity returned to the markets after a U.S. holiday. The Dollar Index (DXY), which compares it to a basket of six currencies, was up at the close 0.05% to 90.52 units.
Fear of reform
Experts attributed the losses to a greater local risk perception due to López Obrador’s energy reform project, which the Federal Economic Competition Commission even criticized.
The reform proposed by the federal government could lead to an increase in tariffs, as well as sanctions for Mexico by Canada and the United States, its USMCA partners, since it seeks to limit private participation in the sector.
Since yesterday, a cold wave left about 4.8 million users without electricity in several states of the country after Texas’s gas supply was interrupted, according to a statement issued by the Federal Electricity Commission (CFE).
The federal government used the energy cut as an argument in favor of the country’s energy autonomy. Cofece itself responded in a statement that the reform violates competition conditions in the country’s electricity industry.
“Little by little, there is more and more talk about the possibility of an energy crisis in our country, triggered by the initiative sent by López Obrador, which will be on the ballot in the next few days,” explained the financial group Intercam in a report.
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