By Raul Cortes, Ana Isabel Martinez and Kylie Madry
MEXICO CITY (Reuters) – Mexican President-elect Claudia Sheinbaum said on Monday she would encourage broad discussions on proposed constitutional reforms, including a judicial overhaul that has spooked markets, before the next congressional session begins.
The judicial reform would replace an appointed Supreme Court with popularly elected judges, as well as some lower courts, which critics say would fundamentally change the balance of power in Mexico.
Sheinbaum said at a news conference after meeting with outgoing President Andres Manuel Lopez Obrador that the reform would be “one of the first” that could be adopted, along with some increased social benefits.
She added that she did not believe the proposed reforms would affect the peso, which plummeted after her election victory earlier this month.
As Sheinbaum spoke, however, the peso weakened nearly 2% in international trade to about 18.55 per U.S. dollar.
“With the current scenario of uncertainty, an exchange rate of 20 pesos per dollar cannot be ruled out for this year,” said analyst Gabriela Siller of Banco Base on X.
Some of the measures are part of a raft of constitutional reforms that Lopez Obrador proposed in February that would also eliminate key regulators.
They didn’t cause market turmoil at the time, but investors sounded the alarm as the ruling coalition targeted a supermajority in Congress needed to pass constitutional reforms in the June 2 elections.
The MORENA-led coalition won a two-thirds supermajority in the House of Commons but fell just short in the Senate, although analysts believe those extra votes can likely be secured through negotiations.
While the newly elected Congress takes office in early September, Sheinbaum will not be inaugurated until a month later, which could give Lopez Obrador and lawmakers a chance to try to push through reforms.
“In the case of judicial reform, the discussion must take place through the bar, the law professors, the ministers and the magistrates themselves,” Sheinbaum said.
She added that she would name her Cabinet next week, and would receive a team sent by US President Joe Biden on Tuesday.
The Mexican peso has now fallen 8% since the election that Sheinbaum and her party won in a landslide – the biggest drop since the COVID-19 pandemic – while the country’s main stock index has fallen almost 4%.
