Carstens Postpones Departure From Bank of Mexico Until November 30th

By Notimex Wednesday, February 22, 2017 comments

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Agustín Carstens was supposed to have left the Bank of Mexico in July. The news has generated a mixed reaction among economists.

 

Governor Agustin Carstens has pushed back his departure from Mexico’s central bank until the last day of November, as the nation faces a surge in inflation and record weakness in the peso, according to an official at the bank with direct knowledge of the matter.

 

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The news boosted the peso which extended its gain, rising 0.3 percent to 20.3682 per dollar, nearing its strongest level in two months.

 

 

Carstens is seen as having a good relationship with the market, particularly regarding his credibility, and therefore if he remains a few months more, this could favour inflation expectations,” said Mariana Ramirez, an economist at Banco Ve Por Mas.

 

 

On the other hand, Alejandro Cervantes, deputy director of economic analysis at Banorte-Ixe, said the decision is creating uncertainty in the sense that it would have been better if President Peña Nieto had already chosen someone to fill the gap.

 

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Since Carstens announced his departure last December, no word has come out from the presidency on his replacement, fueling speculation on the prospects for Banxico’s future leadership. 

 

Mexico is facing the prospect of currency volatility, low growth and high inflation thanks in part to Trump’s threats to renegotiate free trade in North America and slap a tax on companies that send jobs south of the border.

 

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