British publication The Banker has named Bank of Mexico (Banxico) Governor Victoria Rodríguez Ceja as its “central banker of the year” in the Americas.
The London-based magazine announced the designation on Tuesday, highlighting the “proactive” monetary policy adopted by Rodríguez and her colleagues on the Banxico governing board.
“While many countries in Latin America are cutting interest rates, others in the region might feel pressure to ease monetary policy. Instead, Banco de México (Banxico) resisted and maintained a proactive policy stance by shrewdly setting a reference rate that has been consistent with bringing headline inflation down to the 3% target,” said The Banker, an almost 100-year-old publication owned by the Financial Times.
Banxico raised its benchmark interest rate to a record high of 11.25% in March 2023 when the annual headline inflation rate was close to 7%. The central bank has left its key rate unchanged since then, even as inflation steadily declined. An initial cut to the record high rate is considered likely in the first half of 2024.
Banxico, which lifted rates by 725 basis points in a tightening cycle that began in June 2021, “made important efforts to communicate why a restrictive monetary stance was required,” The Banker said.
“From its May 2022 meeting, the governing board — led by governor Victoria Rodríguez Ceja — started to include in its monetary policy statements a roadmap for the reference rate. This helped the market to understand Banxico’s intentions for future monetary policy actions,” the publication said.
It also said that “authorities remained committed to relying on exchange rate flexibility to facilitate adjustment for external and domestic shocks.”
“Banxico adopted a more cautious approach to maintaining reserve levels and opted for a derivatives hedging program to complement the policy toolkit for foreign exchange interventions,” The Banker said.
The magazine said that the central bank under Rodríguez’s leadership “has been quick to respond to other challenges,” including Hurricane Otis, which devastated Acapulco and other parts of Guerrero on Oct. 25.
In the wake of the Category 5 storm, the strongest to have ever made landfall on the Mexican Pacific coast, Banxico, with other Mexican authorities, “activated an emergency plan to provide cash and allowed banks to offer relief programs to their clients,” The Banker said before concluding its summary of the central bank’s recent performance with a quote from Rodríguez:
“Actions like the ones adopted to relieve the damage caused by Otis refer us to our final objective: improving the well-being of the Mexican population. These actions bring Banxico closer to the people, and create a trust relationship central for the functioning and transmission of monetary policy.”
Rodríguez – the first woman to run Banxico – assumed the governorship of the central bank on Jan. 1, 2022, just over a month after she was nominated by President Andrés Manuel López Obrador. She previously served as a deputy finance minister in the federal government.
López Obrador “unnerved financial markets on … [Nov. 24, 2021] by nominating an obscure public sector economist to head the country’s central bank, causing the peso to slide to its lowest level since March,” the Financial Times reported at the time.
The peso, however, has appreciated significantly against the US dollar during Rodríguez’s tenure, partly due to the central bank’s high reference rate and its position well above the U.S. Federal Reserve’s federal funds rate.
The Banker also named a “central banker of the year” for other regions of the world. Andriy Pyshnyi, chairman of the National Bank of Ukraine, was the global and Europe “banker of the year” in 2023, the publication said.
Mexico News Daily
Source: Mexico News Daily
