Electrical Reform Vote/ Increasing interest rates

Electric Reform. President López Obrador said that in the coming days the vote for the Electrical Reform will be held in the Chamber of Deputies. The president called for its approval without modifications. Moreover, he said that voting would confirm if legislators are representing the people or interest groups.

The presidential reform initiative targets the disappearance of autonomous regulators like the Regulatory Commission of Energy (CRE) and the National Commission of Hydrocarbons (CNH), the elimination of self-supply contracts and clean energy certificates (CELs), as well as the cancellation of all existing generation permits and power purchase and sale contracts with private parties. The goal is to strengthen state-owned companies PEMEX and CFE. Although the reform has not been approved yet, it has been highly controversial. Many experts warn that if approved, dirty energy will prevail and be more expensive.

Furthermore, the regulatory uncertainty generated by the government’s electric reform is holding back investment in Mexico. US Ambassador to Mexico, Ken Salazar, publicly acknowledged the difficulties faced by US energy companies in obtaining permits related to the Mexican energy sector during a forum organized by the Atlantic Council in Washington D.C.

"We hope that there will be some resolution, otherwise, there can be no confidence in investment in Mexico," said Salazar during the Migration, Energy, Security and Beyond forum in Washington D.C. López Obrador affirmed that he respects the opinion of the US Ambassador and asks to keep the signed contracts with the energy sector according to current laws. 

Minister of Finance and Public Credit revealed decision of interest rate increase. AMLO said that Rogelio Ramírez de la O, Head of the Finance and Public Credit Ministry, was the one to inform about BANXICO’s decision to increase the interest rate from 6 percent to 6.5 percent. The increase rate was unexpectedly announced by the president before the monetary authority made it public.

López Obrador admitted he made a mistake in informing about the spike in interest rate during his daily briefing and acknowledged that Banxico’s law was violated when the information got filtered. According to BANXICO´s law , people who attend monetary policy meetings are to keep confidentiality regarding issues discussed , except when there is explicit authorization from corresponding authorities to make a release.

Only the Minister of Finance and Public Credit, the Undersecretary of the Finance and Public Credit Ministry, the Minister of the Government Board, Banxico’s Goveror and deputy governors attend these meetings.

New COVID-19 guidelines in April. Olivia López Arellano, Mexico City´s Minister of Health, announced that in April new COVID-19 guidelines will be analyzed and updated. These guidelines could include the removal of mask use. Nevertheless, she asks to keep social distancing and avoid poorly ventilated, closed spaces.

COVID-19 cases in Mexico have been decreasing in the last couple of weeks. This week, the Minister of Health, Hugo López-Gatell, reported that for the eighth consecutive week the country has reported a decrease in COVID-19 cases. The country is now at its lowest levels of pandemic indicators since 2020.

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