Mexico City: Mexico’s President-elect Claudia Scheinbaum’s team assured investors Tuesday that it will stabilize Latin America’s second-largest economy after financial markets rallied after winning Tuesday’s election.
The country’s stock market fell six percent a day after Sunday’s election, as investors feared a leftist candidate’s victory could make it easier to push through reforms that could harm the economy and business.
Sheinbaum’s appointment to the first cabinet resulted in Finance Minister Rogelio Ramirez de la O staying on as she became Mexico’s first female president on October 1.
In a video posted on social media, he said he would “act with dialogue, harmony and great responsibility.”
The letter, confirmed by Ramirez de la O Tuesday, assured investors of the new government’s commitment to “macroeconomic stability” and “fiscal prudence”.
“Our proposal is based on a financial regulation that respects the autonomy of Mexico’s (central) bank, supports the rule of law, and facilitates domestic and foreign private investment.”
The stock market rose more than three percent, with the peso unsteady after falling four percent against the dollar on Monday.
Scheinbaum, a former Mexico City mayor and ruling party figure, won nearly 59 percent of the vote with more than 95 percent of the vote, according to the National Election Institute.
This comes after a violent election season that saw more than two local candidates killed, leading opposition rival Xochitl Gálvez to 31 percent to 28 percent.
The ruling party and its allies are expected to win a two-thirds majority in the lower house of Congress and possibly the Senate.
Gálvez, who conceded defeat after preliminary results were announced, said on Monday that the opposition faced “unequal competition” in the election “against all the state apparatus to support candidates”.
He expressed confidence in the official results, but said he would contest the results, saying “it doesn’t end here.”
Outgoing President Andrés Manuel López Obrador has defended his political victory as “the cleanest and freest election in history.”
Sheinbaum owes much of his popularity to his leftist and mentor Lopez Obrador, who is worth more than 60%. However, due to Mexican presidential term limits, he is only allowed to serve one term.
Opponents accuse him of undermining Mexico’s democratic institutions in his efforts to reform the justice system.
One of the constitutional amendments that requires the approval of two-thirds of Congress is the general election of Supreme Court justices.
Political risk consultancy EMPRA said that with lawmakers expected to reconvene on September 1, Lopez Obrador could have time to push through some controversial reforms before his resignation.
Along with security and relations with the neighboring United States, one of the main challenges facing Scheinbaum is the fiscal deficit, which is expected by the International Monetary Fund to reach 5.9 percent this year.
Credit rating agency S&P Global Ratings said Tuesday that it “does not believe the new administration will significantly change the country’s fiscal, monetary or trade policies.”
