In 30 days the global pandemic of covid-19 and the collapse of oil prices compromised the entire State, while the violence continues unstoppable
In just over a month, Covid-19 forced Mexican health authorities to impose measures to counter the pandemic, such as respecting social distance; suspend activities in educational institutions; Work from home; close restaurants and shops; postpone all kinds of massive events, among others.
The national project of President Andrés Manuel López Obrador (AMLO) is being threatened, as if that were not enough, Mexico is not only going through the Covid-19 health crisis and its consequences, in addition, in the last month it has had to deal with one of the biggest waves of violence in the country, the fall in the price of oil worldwide and the historical rise in the price of the dollar.
Mexico’s violence is not quarantined
2,505 executions related to organized crime were recorded in March. This figure represents 9.2% more than in February, which had 2,294 cases and 70.6% higher than those registered the same month of 2019 when there were 1,468.
According to the daily count of homicide victims, carried out by the Secretariat of Security and Citizen Protection (SSPC) since 2007, this figure has been the highest in 13 years.
Thus, so far in AMLO’s six-year term, that is, since December 1, 2018, there have already been 31,893 executions.
The states with the highest incidence of homicides in March are Guanajuato with 311; In second place is the State of Mexico with 274; Jalisco follows with 198; later, Chihuahua with 192 and at the end, Baja California with 163, being the 28th the most violent of the month, with 102 cases.
Meanwhile, the entities with the least executions were Yucatan, with one; Aguascalientes and Baja California Sur with two executions; Nayarit with four and Campeche with six.
The above data leaves an average of 83 murders daily.
The weight lives its worst month in 26 years
The national currency has experienced a series of ups and downs in recent weeks. Gerardo Esquivel, deputy governor of Banco de México explained in his Twitter account that the fall of the Mexican currency is mainly due to factors that are occurring outside the country.
Since the beginning of March to date, the Mexican currency has gone from 19.62 units per dollar to 24.49, as a consequence of the panic unleashed by the coronavirus, the recess of non-essential activities and a drop in oil prices.
This represents a cumulative loss against the dollar of 19.3%.
Similarly, last Friday, March 20, the dollar registered a historical price when it was quoted at more than 25 pesos per unit.
The so-called “December error” in 1994 is the only period in recent history when the Mexican currency plummeted 32.2% since the exchange market was subject to various pressures.
“This ‘rise and fall’ is normal for currency such as a peso, since it is under a flexible exchange rate regime,” added Esquivel.
In this exchange rate, the price of the currency is determined by market supply and demand, without the intervention of the monetary authority.
The fall in oil prices
The government of President López Obrador has announced hydrocarbon-dependent projects, such as the construction of the Dos Bocas Refinery in Tabasco, one of the flagship projects of his six-year term; however, oil prices have reached lows worldwide.
In that sense, the price of Mexican oil for export closed the first quarter of 2020 with $ 10.76 per barrel, as reported by Pemex, so the Mexican government is far from the $ 49 it calculated for this year’s budget...
As if that were not enough, the International Monetary Fund (IMF) estimated that in March, international investors liquidated assets in Mexico for 4.6 billion dollars, a figure that represents 0.4% of GDP in 2019.
This happened after the Standard & Poor’s rating agency — an agency that evaluates the ability of countries to meet their payment commitments in the face of an adverse economic situation — evidenced the risk paid by 10-year bonds, since of the 141 points that They had at the beginning of the month, they jumped to 404 points, at the cut of March 24.
Every time the points increase by 100 basis points, it means that the risk increases by 1%. This means that at the beginning of March the risk was 1.41%, but it rose to 4.04% at the end of the month.
In the case of Pemex, the risk went from 414 points to 1,117.
Similarly, the rating agency ranked Mexico as the one that has suffered the most significant capital outflows compared to other countries and estimates that the recent episodes are only the beginning, since as the epidemic accelerates and measures are applied to contain the contagion these movements could continue.