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 Business News | August 2006 
Mexico's Currency Holds Near Five-Month High After Vote Recount
 Bloomberg
| | Mexican 20 Peso note |
Mexico's peso held near a five-month high after political parties said former Energy Minister Felipe Calderon won a court-ordered recount of votes from the July 2 presidential election, confirming earlier tallies.
"The bottom line is that the election results won't change and Calderon will be the winner," said Ricardo Amorim, head of Latin America research at WestLB, in an interview from New York.
Mexico's peso traded at 10.8233 per dollar at 2:20 p.m. New York time, compared with 10.8078 by the end of the day on Aug. 11. The benchmark stock index fell 0.1 percent to 20,254.55.
Calderon, 43, a member of President Vicente Fox's National Action Party, pledged to maintain economic policies that have reduced the government's foreign debt, cut inflation and lowered interest rates. Calderon's margin of victory was 243,934 votes out of the 40.9 million valid votes cast July 2, and won't change by more than 1,500 votes following the recount, his party's chief lawyer, Cesar Nava, said yesterday.
Andres Manuel Lopez Obrador, 52, who finished second in the race, said the recount showed evidence of fraud and called on supporters to prepare for at least another month of street protests to demand a full review of ballots. Calderon lost 13,676 votes in the recount, while Lopez Obrador gained about 200, Claudia Sheinbaum, a spokeswoman for Lopez Obrador's coalition, said yesterday.
Today Lopez Obrador supporters blocked Citigroup Inc.'s Mexican headquarters and two other Mexico City offices, adding to two weeks of protests over the July 2 election.
The federal electoral court, which ordered the partial review in response to a complaint by Lopez Obrador, said it won't make the results public until its next ruling.
"Lopez Obrador won't concede defeat," said Amorim. "Confrontation will remain, but markets won't care much."
Congressional Reforms
Mexico's currency may strengthen to 10.63 per dollar by the time the electoral tribunal officially declares a winner in the presidential election in September, said Miguel Gaytan, head of economic research at Mexico City-based consulting firm Bursametrica SA.
The electoral court has until Aug. 31 to settle all challenges and must declare a winner by Sept. 6. The ruling cannot be appealed. The new president takes office Dec. 1.
"Lopez Obrador is losing support even among those that voted for him," Gaytan said. "It's becoming increasingly clear Calderon will be able to acquire the needed support to pass reforms in Congress."
Blockade
Sixty-five percent of voters disapprove of the blockade of Mexico City's main avenue that protesters have maintained since July 30, according to a door-to-door survey of 600 registered voters conducted Aug. 9 and published today by El Universal. The survey has a margin of error of plus or minus 4 percentage points.
Protesters today, some of them holding burning torches, blocked access to the corporate headquarters of Citigroup's unit, known as Banamex, according to images broadcast on the Televisa television network. They also prevented customers and employees from entering offices along Paseo de la Reforma, one of the city's main avenues, and in the colonial center, the broadcast showed.
The yield on the government's benchmark 8 percent bond due in December 2015 rose 2.5 basis points, or 0.025 percentage point, to 8.16 percent. The price, which moves inversely to the yield, fell 0.16 centavo to 98.94 centavos, according to Santander Central Hispano SA.
Concern that rising prices in the U.S. will prompt the Federal Reserve to raise interest rates one more time next month is causing bonds to fall, said Gaytan in a phone interview from Mexico City.
Still, the yield on the benchmark bond may fall to 7.8 percent by year-end on a Calderon victory, Gaytan said.
To contact the reporter on this story: Valerie Rota in Mexico City at vrota1@bloomberg.net. |
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