Electoral Reform/Mexican Peso Appreciates Again

Electoral reform. President Andrés Manuel López Obrador said that his electoral reform will probably be annulled by the Supreme Court of Justice.t is very probable that the Judiciary will repeal the electoral law and Edmundo Jacobo, Counselor, INE will return to office.”

On Feb. 22 Mexico´s senate approved the reform with 72 votes in favor and 50 against.  According to the new law, the National Electoral Institute´s budget (INE) will be slashed as well as its workers´ salaries, the financing of local electoral offices and the training of polling station officials. Plan B also eliminates INE’s budgetary autonomy, lays off 84.6% of the personnel that work for the National Electoral Service (SPEN) and reduces sanctions for candidates who do not declare their campaign expenses.

Last weekend, hundreds of thousands of people gathered to protest against the government’s Plan B of the electoral reform. According to Mexico City’s government, around 90,000 people participated in Sunday's protest. Nevertheless, other media sources have reported that more than 500,000 people gathered at the Zocalo, Mexico City's main square. 

Mexican Currency. President López Obrador said that the peso hit a historical record at the beginning of March. "Mexico is the country with the greatest currency strength, there has been an appreciation of the peso just over10%. This has not been seen in half a century."

For a third day in a row, the value of the peso is increasing due to a weaker dollar, record remittances from abroad, and investment announcements like Tesla. Yesterday, the Mexican peso was trading at MX$18.14 per dollar, reaching its strongest level in the last five years, reported Bloomberg.

In 2022, the country's economic growth was favorable. The year’s second quarter was the best-performing quarter, with a growth of 1.2% and cumulative GDP growth of 3%. Mexico’s economic activity recovered to significant levels, mainly because tourism increased by 45% compared to 2021. In addition, exports from the automotive sector and remittances also increased.

Remittances. President López Obrador stressed that during his government remittances have become the country’s main source of income. The president reported that US$4,406 million were sent to Mexico in January, while in February it was US$4,340 million, up 11% and 12% respectively over 2022.

According to the Bank of Mexico, the country became the second largest recipient of remittances in the world. In 2022, there was a 13.4% increase compared to the US$51.586 billion received in 2021. Officials said this amount exceeded expectations, since many expected to be affected by the slowdown of the US economy.