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Mexico’s central bank leadership was shattered on Tuesday after Senate President Ricardo Monreal announced that the name of the chief executive had been removed, sparking financial uncertainty at a time when inflation was rising.
The appointment of Arturo Herrera, a former finance minister under President Andrés Manuel López Obrador, was announced in June. He is expected to start in January, awaiting confirmation from the Senate.
Monreal said the government withdrew its election in August but did not explain why, adding that Herrera could be re-elected.
Herrera himself later confirmed on Twitter that the President had told him he would consider reconsidering his appointment, without giving further details.
The presidency did not immediately respond to a request for comment and has not commented on the matter since the news broke.
Herrera was seen by investors to be close to the president, but experts said Tuesday’s news had raised serious economic concerns. “There is a lot of uncertainty, a lot of noise,” says Adrián de la Garza, a Mexican economist in Citi.
De la Garza said a number of names were circulating to the potential nominees, if Herrera would not be present, including Raquel Buenrosto, SAT chief executive Gabriel Yorio, deputy finance minister, and other members of the bank. He thinks instead of Herrera could be a knowledgeable man.
“This could be a problem in the markets in the short term, but uncertainty should end.”
In December last year the ruling party caused a stir as it tried to pass a law forcing the Bank of Mexico to buy dollars that banks could not repay. Accounting agencies said the idea was wrong for the governor and the bank withdrew a lot. Eventually the order was abolished.
The issue came up a few hours after the government issued an urgent order mega-project and within discussions of major power sector changes. Proponents of her case have been working to make the actual transcript of this statement available online.
With rising inflation, the central bank raised the prices of the fourth consecutive meeting in early November in a 4-1 vote split among members. Herrera is considered by the markets to be more critical than current ambassador Alejandro Díaz de León.
Mexico’s economy suddenly contractor in the third quarter, preliminary data were presented, with a decrease in global weapons hitting the automotive sector and operational changes increasing.
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