Mexico Peso Slumps on Pena Nieto Energy Delay and GDP ForecastBen Bain
Mexico’s peso weakened for the first time in four days as President Enrique Pena Nieto pushed back the announcement of a proposal to overhaul the energy industry and central bank policy makers slashed their growth forecast.
The peso slumped 0.8 percent to 12.7167 per dollar at 4 p.m. in Mexico City. Yields on Mexican government peso bonds maturing in 2024 increased one basis point, or 0.01 percentage point, to 5.85 percent, according to data compiled by Bloomberg.
Pena Nieto, who yesterday said he was planning to present his bill this week, said today on his Twitter account he’ll delay releasing his plan to end Mexico’s seven-decade state energy monopoly until next week. The currency had rallied this month amid speculation lawmakers will approve an overhaul of state-owned Petroleos Mexicanos to boost growth.
The delay may show some problem in negotiations between political parties even as the bill remains a top priority for Pena Nieto, according to Roberto Galvan, a currency trader at Intercam Casa de Bolsa SA.
“Postponing it is seen in a very bad light,” Galvan said in a telephone interview from Mexico City. “Everyone expected that it would be presented today.”
The currency extended losses after Mexico’s central bank cut its 2013 economic growth forecast to 2 percent to 3 percent, compared with the 3 percent to 4 percent previously forecast.
The peso’s selloff today was the biggest among 16 major currencies tracked by Bloomberg.