The previous week was positive for the Mexican peso, with its best performance since the beginning of the month.
However, the optimism may be short-lived, as the uncertainties surrounding the financing of the biggest national oil company Pemex keep affecting the markets.
Mexico finances oil company “Pemex”
In February, the Mexican president Andrés Manuel López Obrador (AMLO) announced his plan to reduce the debt burden of Pemex by injecting about $5.5 billion into the company.
Later, he approved the construction of the oil refinery project, which was expected to cost around $2.5 billion.
The financial markets reacted to these steps negatively, describing them as a poor usage of money.
Moreover, S&P downgraded the credit rating for Pemex at the beginning of March.
As a result, the MXN weakened.
Last week the deputy finance Minister Arturo Herrera said that the $2.5 billion refinery project would be delayed.
Contrary to his words, AMLO said that the project would be done on time and that the government would have enough money to finance both Pemex and the refinery.
We anticipate the government to announce its further plans to support the biggest oil company this week.
If they are appreciated by the market, the MXN will continue its rise.
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