Banxico raises its interest rate to 10% for the first time in history

Experts evaluate possible replacements for Gerardo Esquivel in Banxico

“From what we have seen with the nominations throughout this Administration, what would already be a tradition has not been fulfilled, that the Governing Board had members, was made up, of people who made a career within the central bank,” said Janneth Quiroz Zamora, vice president of economic studies at Monex Casa de Bolsa.

This includes the appointment last year of the former head of spending at the finance ministry, Victoria Rodríguez, as governor of the bank, despite her limited experience in monetary policy.

Although the chances are slim, Esquivel could end up surprising Banxico watchers by being re-elected for a second eight-year term, which would likely see him continue to support looser monetary policy than other board members.

Here are some of the candidates economists believe could replace Esquivel:

Gabriel Yorio

As second-in-command of the Finance Ministry, led by Rogelio Ramírez de la O, Yorio has been part of the team that has kept the deficit in check amid major spending like a new airport and refinery. As his undersecretary, he attends central bank board meetings without voting rights and is the government’s public voice on issues ranging from oil hedging to a pact to limit inflation.

Previously, he worked at the Mexico City Ministry of Finance, at the Banco Nacional de Comercio Exterior SNC, and at the World Bank.

“Yorio has relevant experience in macroeconomics, markets and policies. The markets will probably welcome his appointment,” said Alonso Cervera, chief economist for Latin America at Credit Suisse Group AG.

Lucia Buenrostro

Vice-president of regulatory policy of the National Banking and Securities Commission (CNBV), Buenrostro has a PhD in economics from the University of Warwick, in the United Kingdom. She worked in the private sector at Commerzbank AG, and held senior positions at López Obrador’s Banco del Bienestar and the country’s health regulator.

His sister, Raquel, is a close ally of López Obrador and was recently appointed economy secretary.

“I do not remember with this point that I have close experience in a field related to Banco de México. I don’t see it that way. Again, it would not be a restriction by law,” said Joel Virgen Rojano, director of strategy for Latin America at TD Securities.

John Paul de Botton

Undersecretary of Expenditures of the Ministry of Finance, De Botton occupies the same position that Rodríguez had before being elected to the highest position at Banxico.

Previously, he served as director of two development banks and worked in the Tax Administration Service. He was also part of López Obrador’s transition team. Some point out that he has less experience than Yorio and is less well known in the financial markets, but his work at the finance ministry makes him a competitive player for the job.

Others think the president is unlikely to let him leave his current post. “However, it seems difficult for the government to want to let the undersecretaries go, because they work very well in the government team,” said Gabriel Casillas, head of economics for Latin America at Barclays Plc, referring to De Botton and the undersecretary. of the Treasury, Gabriel Yorio.

jorge mendoza

Director of the Banco Nacional de Obras y Servicios Públicos, Banobras, trained at Harvard, Mendoza is one of the few high-level public officials to work with López Obrador after previously serving in the Administration of former President Enrique Peña Nieto. Before being posted to Banobras when López Obrador took office in 2018.

Mendoza was director of corporate finance at the Mexican public utility company and held senior positions in public credit and international affairs at the Ministry of Finance. Mendoza worked in mergers and acquisitions for Barclays Capital in New York and in investment banking for Credit Suisse Group AG before entering the public sector.

He has an MBA from Harvard University and a BA in Finance from the University of Texas, Austin.

Julio Santaella

The former president of Mexico’s statistics institute is no stranger to the central bank, having been part of its economic research team. He has also worked on macroeconomic policy at the Ministry of Finance, as well as at the International Monetary Fund.

He has a Ph.D. from the University of California, Los Angeles. Santaella and Édgar Amador, both technical advisers to the governor of Banxico, “have extensive experience in monetary and fiscal policy,” Gabriel Lozano, chief Mexico economist for Mexico, wrote in a note this month. JPMorgan Chase & Co.

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