AMLO, Banxico: crisis control

The presidential nominee to be the next governor of Banco de México, Victoria Rodríguez Ceja, via Twitter, issued a key and forceful message for the markets.

He said that he will respect the autonomy of Banxico and not that he will not interfere with international reserves.

His words obviously seek to eliminate the uncertainty that President Andrés Manuel López Obrador caused in the markets by withdrawing the previous nomination of Arturo Herrera, former Secretary of the Treasury, as the next governor of the central bank.

The uncertainty that was registered was not only due to the sudden presidential decision, but also due to doubts regarding who will be the next responsible for monetary policy and the direction that the institution will take.

The reaction of uncertainty and concern was generalized. Social networks registered it.

President López Obrador was forced to immediately release the name of the nominee.

And it was noted that he had to improvise the reasons for the change, with a few words that did not sound very convincing.

It was clear that he did not want to disclose the real reasons that led him to lower the nomination to the former Secretary of the Treasury for whom, at the time, last June, he only had words of praise regarding his work and profession.

Now, he also did not hesitate to praise Rodríguez Ceja, who went so far as to say that she is responsible for the financial stability of the Mexican government and that additional debt has not been resorted to.

In this regard, it should be said that the merit of this work is largely explained in Herrera’s management.

The other reason mentioned by the chief executive was the female gender. She said the intention is to show that women are given participation.

The president’s reasons for withdrawing Herrera’s nomination are not yet public.

And it is very likely that sooner rather than later they will be made public.

The president has accustomed us to the fact that after reiterating the phrase: “my chest is not a cellar”, he usually reveals the truth about matters that he does not mention in principle.

But for now, with the ability that characterizes the chief executive, he left immediately with the intention of putting out the fire of the uncertainty that he himself generated.

In the afternoon, in a video posted on Twitter by the Secretary of the Treasury, Ramírez de la O. said that in that unit they are dedicated to preserving healthy finances and respecting the autonomy of the Bank of Mexico.

De Rodriguez Ceja said that she is an honest, competent and respected official.

And she stressed that in her tenure as Undersecretary of Expenditures she never allowed a gap in the goal of the fiscal balance approved by the Congress of the Union.

Obviously, both the president of Mexico and the person in charge of public finances warned of the importance of going out to close the door to uncertainty and therefore issued the respective messages.

It was a clear reaction that sought to control a crisis of uncertainty that directly hit the exchange rate.

Hence the messages. On the part of President López Obrador, by rejecting the correlation between the uncertainty generated by his decision and the exchange rate coup, the forced dissemination of the new nominee, the exaltation of her merits and the shelter of the head of public finances.

And most importantly, Rodríguez Ceja’s public commitment that he will respect the autonomy of the central bank and that he will not interfere with international reserves.

As for whether or not it meets the requirements established by law, there will undoubtedly be controversy.

Glimpses

GALLOP? The conjunctural inflation will be taking the rhythm of the gallop? Inflation reaches 7.05% in the first half of November, the highest level in 20 years

In the first half of November, it surpassed the 7% ceiling, something that had not happened for two decades. And everything indicates that inflation will continue to rise. In the midst of this inflationary wave, there is a stumbling block in the central bank government.

The good news is that the institute operates under the management of a collegiate body. Hopefully it preserves its intangible but valuable autonomy. Let’s see.

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