Mexican Peso Increases before Telecommunications Bill Debate at Senate

The major currency of Mexico, Mexican Peso has increased the most in last 7 days as the Senate is prepared to debate a bill which is designed to boost competition in telecommunications industry of Mexico. This has fueled optimism about current outlook for foreign investment in this Latin American country.

Mexican Peso has increased by 0.3% on today and is currently priced at 12.3323 per USD. This marks the biggest gain for the currency on a closing basis since 22nd March. So far, in 2013, Mexican Peso has increased by 4.2% against USD. This marks the biggest surge among the most-traded counterparts of the greenback.

Right on today, the Senate lawmakers are set to start the discussion process of the legislation. The legislation has already cleared the lower house on last month and it seeks to foster improvement in the telecommunications industry of the country. The Mexican telecommunications industry, now, yields $30 billion every year.

Parties who are opposing this legislation feel that some changes to certain aspects of the proposal should be made. Jesus Zambrano, who is the head of the opposition party Democratic Revolution Party, stated that though they have few concerns regarding the bill, there should not be any big problem in passing the same by end of this month.

Eduardo Suarez, who is the Latin American Currency Strategist of Bank of Nova Scotia, stated that the reform front has a positive momentum for quite some time and it is expected to stay so for the next few weeks as well. Eduardo added that the low telecom costs are positive thing for any of the industries and if a country has a lower cost structure, for investors, it automatically becomes more attractive for possible investment.

On 11th March, Pena Nieto stated that the current reform is going to allow possibilities of further growth in this Latin American country. However, for achieving this, companies need to invest and innovate as well. They should be offering better prices and also improve the overall quality of the service being offered now.

As far as yields on the Peso denominated bonds which are due in 2024 are concerned, those were more or less unchanged on today and are currently at 5%. When it comes to the price, these went down by 0.05 Centavo and are currently at 144.26 Centavos per Peso.