Mexico president says judicial overhaul will proceed despite market jitters
MEXICO CITY (Reuters) -Mexico's outgoing President Andres Manuel Lopez Obrador said on Wednesday that people are "mistaken" if they think his drive to overhaul the country's judiciary will be reversed because of market nervousness.
Later on Wednesday, the country's incoming president, Claudia Sheinbaum, again sought to calm investor concerns, lauding what she described as a strong national economy while suggesting the peso currency's recent slide was temporary.
Mexican markets have been roiled since Lopez Obrador's leftist MORENA party performed better than expected in the June 2 election, breathing new life into stalled efforts to pass a slate of constitutional reforms, including one which would replace an appointed Supreme Court, along with lower courts, with judges directly elected by voters.
"They are wrong, respectfully, if they are thinking that we are going to go back on reforming the judiciary, which is rotten, which is dominated by corruption, just because there is financial nervousness," Lopez Obrador told reporters.
Mexico's peso currency, a regional high achiever in recent years, tumbled about 10% last week following the landslide win by Sheinbaum and MORENA, weakening against the dollar as much as 2.2% in early trading on Wednesday and last down some 0.8% on the day.
Sheinbaum, a close Lopez Obrador ally who will take office in October, has sought to calm investor nerves, while at the same time defending as a top priority the judicial overhaul, which critics argue will fundamentally alter its independence from politics as well as chip away at democratic checks and balances.
"The Mexican economy is solid, these are special moments and it will get adjusted," she said, batting away concerns over the peso's recent fall.
"There isn't nervousness, or any problem," she added.
Ricardo Monreal, MORENA's Senate leader, noted on Wednesday that lawmakers could modify, or "enrich," the proposed reforms following forums planned by lawmakers to publicly discuss them. "That possibility is not ruled out," he said.
Yields on local sovereign debt also continued to rise, with the 10-year benchmark note up to 10.5%, the most since 2008. Eurobond spreads were little changed.
In the lower house of Congress, MORENA secured the two-thirds super-majority required to pass constitutional reforms unopposed, while coming just shy of the super-majority in the Senate.
(Reporting by Raul Cortes Fernandez, Brendan O'Boyle, and Drazen Jorgic; Additional reporting by Rodrigo Campos; Writing by Brendan O'Boyle; Editing by Stephen Eisenhammer, Drazen Jorgic and Alistair Bell)
