Mexico’s peso pared losses after President Enrique Pena Nieto said he’s negotiating with lawmakers to break the state monopoly over oil and gas exploration and production this year.
The currency declined 0.8 percent to 12.8201 per dollar at 2:13 p.m. in Mexico City after earlier falling as much as 1.3 percent. The peso rebounded as Pena Nieto’s comments boosted confidence he’ll make good on his pledge to open up the state-controlled energy industry, according to Ramon Cordova, a currency trader at Banco Base SA.
Pena Nieto said in an interview with Bloomberg News in London that he envisions a model in which state-owned Petroleos Mexicanos would develop certain fields, with others being tapped by private companies. He said his administration will send the energy bill to congress by September and he’s confident the so-called Pact for Mexico between the country’s top three political parties will ensure the bill is approved by year-end.
“What the market wants is the reforms to pass,” Cordova said by phone from in San Pedro Garza Garcia, Mexico. The comments indicate “that the energy reform is on a good path and it gives some more information because up until now it’s been very opaque as to what are the actual points that the reform will encompass.”