(Bloomberg) — Mexico’s finance minister told investors in a call Tuesday that Mexico remains committed to reducing the country’s deficit, a day after newly elected President Claudia Sheinbaum confirmed he had agreed to remain in his role during her government.
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The government will continue to respect the central bank’s autonomy and seek closer cooperation with debt-stricken state oil company Petroleos Mexicanos, Minister Rogelio Ramirez de la O said, according to people with direct knowledge of the call. He added that Juan Ramon de la Fuente, Mexico’s former ambassador to the United Nations and a leading member of Sheinbaum’s campaign, would lead the new administration’s transition team and noted that he was also on the call.
The call was aimed at calming investors after the Mexican peso fell 3.8% post-election to its worst one-day decline since June 2020, as a stronger-than-expected majority suggests the ruling party will be able to move forward with reforms in Congress . The currency had already pared losses before the investor call began, weakening 0.7% after the call.
De la O said Mexico’s deficit would be reduced to around 3% of gross domestic product and the country’s debt would be kept on a sustainable path. On Pemex, he added that government agencies “would benefit from the support that should be reflected in Congress to optimize the good use of public resources.”
He added that the government would pursue strong communication with investors and credit rating agencies to reaffirm “macroeconomic stability and fiscal prudence and the feasibility of our fiscal targets” as priorities.
The call was “very short” and did not address key investor concerns, including a series of congressional reforms put forward by President Andres Manuel Lopez Obrador earlier this year, said Marco Oviedo, a strategist at XP Investimentos, who participated in the call .
“The problem is that it is about the reforms that Morena wants to implement,” Oviedo said.
(Adds details on the call, currency movement and analyst commentary.)
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