Carstens Postpones Departure From Bank of Mexico Until November -- Update
February 20 2017 - 5:59PM
Dow Jones News
By Juan Montes
MEXICO CITY -- Bank of Mexico Gov. Agustín Carstens will stay at
his position until the end of November, five months more than
initially expected, as the country goes through a difficult
economic patch of quickly rising inflation, currency volatility and
low growth.
Mr. Carstens reconsidered his decision to step down from the
Bank of Mexico in July and agreed with President Enrique Peña Nieto
to stay longer at the helm of the central bank, a top official at
the central bank who spoke on condition of anonymity said
Monday.
The Bank of Mexico announced in December that Mr. Carstens, 58
years old, would step down in July to become general manager of the
Switzerland-based Bank for International Settlements, or BIS.
Since then, Mexico's economic outlook has quickly worsened.
Inflation rose in January to 4.72% -- the highest since 2012 --
after a steep jump in gasoline prices at the beginning of the year,
while most economists expect the economy to slow down to 1.6%
growth this year. The peso hit in January a record low against the
U.S. dollar.
Mr. Peña Nieto's government had wanted Mr. Carstens to stay at
the bank to help Mexico's economy navigate what is likely to be a
complicated renegotiation of the North American Free Trade
Agreement with the administration of U.S. President Donald Trump.
Nafta is the backbone of Mexico's export-oriented economy.
The decision is sure to reassure investors as Mr. Carstens is
Mexico's most respected economic official at the international
financial stage, having previously served as deputy director of the
International Monetary Fund.
Since the Bank of Mexico announced Mr. Carstens was stepping
down, many political leaders, local businessmen and influential
intellectuals have harshly criticized the decision and its
timing.
"We had in Carstens, man that I respect and admire, a rock of
stability in the storm we are in. We don't have it anymore. A
scandal," Héctor Aguilar Camín, a renown writer and historian,
wrote in December.
After the postponement, it wasn't clear when Mr. Carstens would
take office as the head of BIS. Initially, Mr. Carstens was
expected to assume the job in October. He would be the first BIS
leader to come from an emerging-market country.
Mr. Carstens took over the helm at the Bank of Mexico in 2010,
and is serving his second term. Under his watch, the central bank
managed in 2015 to get inflation down to record-low levels. Last
year, the bank began to raise interest rates aggressively as a weak
peso started to impact on consumer prices through more expensive
imports.
Mr. Carstens' career has been closely linked to the Bank of
Mexico, where he began working as an assistant analyst in 1980 at
the age of 22. He studied at the University of Chicago, where he
earned a master's degree and doctorate in economics.
At the international level, Mr. Carstens served as deputy
managing director of the International Monetary Fund from 2003 to
2006. He was also finance minister from 2006 to 2010 under former
President Felipe Calderón.
Write to Juan Montes at juan.montes@wsj.com
(END) Dow Jones Newswires
February 20, 2017 17:44 ET (22:44 GMT)
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