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article imageMexican peso, stocks fall as leftist wins presidency

By AFP     Jul 2, 2018 in Business

The Mexican peso and stock market both fell Monday after the country elected the anti-establishment leftist Andres Manuel Lopez Obrador as its next president.

After the fiery candidate known as "AMLO" swept to a landslide victory, the Mexican stock market's key index lost 2.12 percent, while the peso closed down 0.9 percent against the dollar.

Lopez Obrador has promised radical change for Latin America's second-largest economy -- though he went to great lengths Sunday night to reassure his many critics in the business world that he would pursue market-friendly policies.

"We will respect the central bank's autonomy. The new government will maintain financial and fiscal discipline. State obligations with domestic and foreign companies and banks will be respected," he said in his victory speech.

He maintained his vow to review the contracts signed with foreign oil firms under outgoing President Enrique Pena Nieto's landmark privatization of the energy sector, but pledged to act only if he found evidence of corruption, and then only in Congress or the courts.

"We will not act arbitrarily, nor will there be confiscations or expropriations of property," he said.

The National Hydrocarbons Commission, which is overseeing the oil auctions, said it welcomed the planned review and that the privatization was being carried out with "maximum transparency."

Still, there are lingering market jitters over a candidate who clashed openly with the business sector during the campaign.

"We still have little clarity on AMLO's economic policies," the consultancy Capital Economics said in a note.

"We'll be looking in the coming weeks for indications of the size and nature of any fiscal stimulus or signs of a more interventionist energy policy."

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