Nomination for Banxico scares the markets

The nomination of Victoria Rodríguez Ceja to head the Bank of Mexico (Banxico) caused confusion yesterday in the financial markets and among analysts, both due to the ignorance of her position on monetary policy issues, and because of her low profile.

Immediately, the announcement of President Andrés Manuel López Obrador caused a rebound in the dollar at the beginning of the session, and the price for sale at bank windows soared 36 cents above Tuesday’s close, to 22.08 pesos, according to CitiBanamex data. .

Hours later, in a video message shared on the Twitter account of the Secretary of the Treasury, Rogelio Ramírez de la O, the still Undersecretary of Expenditures said that, if they ratify it, it will fulfill its function respecting the autonomy of Banxico, in addition to its The commitment will be to fight inflation and not touch international reserves.

Experts believed that it does not meet the requirement of having recognized competence in monetary matters, although they said they trust in its ability.

“The first reaction was a certain fear of the unknown, because Victoria Rodríguez Ceja is not a high-profile personality; the market does not know it, it does not know what its position will be, “said Vice President and Chief Investment Officer at Franklin Templeton, Luis Gonzali.

He added that what was seen yesterday, with the peso-dollar exchange rate rising, responds to the market reacting and seeking to sell risk positions.

Although the dollar was strengthened by favorable economic data from the US, the exchange rate closed at 21.96 pesos, its highest level since October 2020.

For analysts, there are no details of Rodríguez Ceja’s thinking as an economist, or if he agrees more with orthodoxy.

“I believe that the appearance in the Senate is going to be an important milestone, because it will be when it becomes public and its position can be known,” Gonzali said.

“We do not know if he has written something or has knowledge in the matter, that is what makes the market a little nervous,” he added.

Those who have worked with who would be the first female governor of the Bank of Mexico, if ratified by the Senate, say that it is discreet, does not like the spotlights, is orderly and schematic.

The Undersecretary of Finance, Gabriel Yorio, was their fellow student at El Colegio de México, where they met Carlos Urzúa as their professor and later their boss in the CDMX Secretariat of Finance.

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Pros and cons

For the director of Bursamétrica, Ernesto O’Farril, although Rodríguez Ceja has a reputation for being honest and with good academic preparation, the Banxico Law establishes requirements.

“He has a good resume, but to be governor you have to have five years of monetary experience, and that was criticized for Arturo Herrera,” he said.

The decision to remove from the nomination the former Secretary of the Treasury, a candidate weak in requirements, and put another equal, he said. That is why it is speculated that the Senate will not approve it, which was reflected in an exchange rate “that flew.”

Specialists recalled that the last person to join the Banxico Governing Board, Deputy Governor Galia Borja, was also questioned about her experience, but ended up being endorsed by the Senate.

“The markets do not penalize her for being Victoria, because her credentials are acceptable, with solid academic preparation. It is not her, but the messy process, but now the market has to listen to her, ”said Pablo López Sarabia, professor-researcher from the Department of Economics at Tec de Monterrey, Campus Santa Fe.

In the morning conference, President López Obrador said that Rodríguez Ceja “is due to the fact that we have financial stability, that we have not resorted to additional debt.”

Meanwhile, the president of the Senate Political Coordination Board (Jucopo), Ricardo Monreal, reported that he has already begun meetings with coordinators of the political parties to agree on the process of ratification of this appointment. With information from Rubén Migueles, Pedro Villa y Caña and Alberto Morales

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