Mexican Judiciary Reform Spurs Market Jitters as Peso Slides

Mexican President Andres Manuel Lopez Obrador's proposed judiciary reform, which aims to introduce popularly elected judges, could be approved in September. The announcement has caused market instability, with the peso weakening by 1.5%. Lopez Obrador aims to push this reform before President-elect Claudia Sheinbaum takes office.

(Adds context on window to enact reforms, recent market activity) MEXICO CITY, June 11 - Mexican President Andres Manuel Lopez Obrador said on Tuesday that his proposed judiciary reform could be approved in September, further spooking markets as the peso weakened 1.5%.

When asked about a transition meeting with President-elect Claudia Sheinbaum on Monday, Lopez Obrador said he continues to urge his judicial reform, which was first proposed in February and aims to replace an appointed Supreme Court with popularly elected judges. The ruling coalition fared even better than expected in the June 2 election, giving them a super-majority in the lower house and close to one in the Senate and putting them in a strong position to pass constitutional reforms when the new legislature takes office.

While the newly elected Congress will take office at the beginning of September, Sheinbaum will not be inaugurated until a month later, giving Lopez Obrador and lawmakers a window to try to enact his reforms. The prospect of the reform, which Sheinbaum has said would be "among the first" that could be passed, has prompted market jitters and Mexico's peso to slide.

The peso weakened some 1.5% Tuesday following Lopez Obrador's comments. Last week it weakened 7.55% against the dollar, its largest weekly decline since the start of pandemic lockdowns in March 2020.

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