Mexico’s financial markets were rocked on Monday by their worst losses since the start of the COVID-19 pandemic, following the election victory of Claudia Sheinbaum, the ruling party’s candidate.
The Mexican Stock Exchange’s main index plummeted by 6.11%, while the peso weakened to its lowest level in over a year at 17.71 pesos per dollar.
Prior to the election, the peso was soaring and nicknamed the “super peso” by the government. However, the prospect of policy changes under the new administration caused investors to flee, fearing future economic uncertainty.
With the ruling party possibly gaining a majority in Congress, investors are wary of potential constitutional reforms that could impact the economy.
The sudden market crash highlights how quickly investor sentiment can shift based on political events. Now, all eyes are on the new administration for clues on future economic policies.
The Mexican economy, which has been thriving, now faces uncertainty as investors wait to see if the current financial stability will continue or if turbulence lies ahead.