Pena Nieto Said Against Changing Banxico Law in Governor Pick

  • Current law limits potential choices based on age, birthplace
  • President said to discuss candidates without formal short list

Mexican President Enrique Pena Nieto is leaning against asking Congress to do away with age and birthplace requirements as he prepares to nominate a new central bank head, according to a person with knowledge of the selection process.

Jose Antonio Meade

Photographer: Susana Gonzalez/Bloomberg

Pena Nieto in December consulted with Finance Minister Jose Antonio Meade, former Finance Minister Luis Videgaray and current central bank Governor Agustin Carstens about the selection process and some possible candidates, according to the person, who asked not to be identified discussing private deliberations. The president doesn’t have a goal for when to nominate someone, nor does he have a short list, the person said.

Mexican law limits the five members of Banco de Mexico’s board to people 65 or younger at the start of their term and requires that they have been born in Mexico. That eliminates people like Alejandro Werner, the western hemisphere head at the International Monetary Fund born in Argentina, and veteran policy makers such as Angel Gurria, Francisco Gil Diaz and Guillermo Ortiz. Changing the rules would open a congressional debate so broad that lawmakers could conceivably try to add employment as a second mandate alongside price stability or erode the bank’s autonomy.

Alejandro Werner

Photographer: Daniel Acker/Bloomberg

Pena Nieto is looking for a replacement for Carstens at a time when the nation is facing the highest inflation since 2012 after a surge in gasoline prices and a tumble in the peso. The central bank is forecast to raise its key rate, already at the highest since 2009, by a half point to 6.25 percent next week.

Carstens plans to step down in July to run the Bank for International Settlements, leaving Mexico without its best-known policy maker amid new economic challenges from U.S. President Donald Trump, who has promised to end or renegotiate the North American Free Trade Agreement and tax automakers who import cars from Mexico. Economists have mentioned Werner, deputy governors Alejandro Diaz de Leon and Manuel Ramos Francia and deputy Finance Minister Miguel Messmacher as possibilities to replace Carstens.

The Mexican finance ministry’s press office declined to comment.

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE