Banca sees no risk to the autonomy of the Banco de México despite controversy

Acapulco, 24 Mar The Mexican Banking Association (ABM) said Thursday that it “sees no risk” in the autonomy of the central bank following the controversy created by President Andrés Manuel López Obrador, who unprecedently advanced his monetary decision. The leader of the ABM, Daniel Becker, expressed his confidence in the new governor of the Bank of Mexico (Banxico), Victoria Rodríguez Ceja, appointed by López Obrador, in the face of questions from the press at the beginning of the 85th Banking Convention. “He has clearly indicated and expressed to us the autonomy given to him by both the president, the federal government, and his support of the Governing Board, and we see no risk of losing any kind of autonomy with the new governor,” Becker said. The initial press conference of the Banking Convention, which this Thursday and Friday returned in person to the Acapulco spa, was marked by the controversy of López Obrador, who in his morning press conference revealed that Banxico decided to increase the interest rate 0.50 points to 6.5%. “The decision of the Banco de México yesterday (Wednesday) was taken unanimously, and we respect the decision of the Banco de México,” López Obrador said at his morning conference at the National Palace, breaking all precedents. López Obrador has appointed four of the current five members of the Governing Board, including Rodríguez Ceja, who sparked accusations by the opposition of not having experience in monetary policy. At the insistence of the press, the leader of the ABM argued that in the association “he will not comment on things that they are not sure about.” “What we could say about this is that we are very respectful of the central bank's autonomy,” he said. “We should only add more than to say that ABM has always been and has been very vocal in the sense of the importance of having a central bank with a mandate for price stability,” he concluded. Banxico's decision - which will be officially announced this Thursday afternoon - represents the seventh consecutive increase in the rate and the third in a row of 50 basis points. The last time it went up was on February 10, in the debut of Governor Rodríguez Ceja. Raúl Martínez-Ostos, vice president of the ABM and president of Barclays, also expressed his confidence in Banxico, arguing that it is a collegiate body that does not depend solely on Rodríguez Ceja. “We saw in the first announcement by the Banco de México, with the new governor, a clear signal that legitimizes the autonomy and plurality of the junta. Then, without a doubt, and we saw it with the response of the markets, it was very well taken by the markets, and we hope that this will continue,” he said.