In blow to Mexican president, finance minister quits over economic ‘extremism’
MEXICO CITY, (Reuters) Mexico’s moderate Finance Minister Carlos Urzua resigned yesterday with a letter that shocked markets by citing “extremism” in economic policy, before President Andres Manuel Lopez Obrador quickly named a well-regarded deputy minister to replace him.
In the unusually strongly worded resignation note made public on his Twitter account, Urzua said the government was forming economic policy without sufficient foundation.
“I’m convinced that economic policy should always be evidencebased, careful of potential impacts and free of extremism, either from the right or the left,” Urzua wrote.
“These convictions did not resonate during my tenure in this administration,” Urzua said.
He also said there were what he called conflicts of interest in the appointment of some ministry officials imposed on him by influential members of the government. He did not give more details.
The Mexican peso fell over 2% on the news and the benchmark stock index slid almost 1.5%. Both recovered a little after Lopez Obrador quickly promoted Deputy Finance Minister Arturo Herrera to the top job.
Well known to investors and seen as a competent economic manager, Herrera now has the task of reviving economic growth while meeting a 1 percent primary budget surplus, kickstarting flagging investment and fending off downgrades from ratings agencies worried about indebted state-oil company Pemex.
“(Herrera) is a well-known figure with good dialogue with market participants and is not perceived as a ... dogmatic individual,” said Alberto Ramos, head of Latin American research at Goldman Sachs.
“But in light of the unusual content of Urzua’s resignation letter there is out there the lingering question of who is ultimately in charge of running economic policy,” Ramos said.
Urzua, a slightly disheveled former academic prone to mild verbal gaffes, was a very different finance minister from Mexico’s recent tradition of slick technocrats who spoke the language of Wall Street.
However, he was seen by markets as a moderate whose commitment to fiscal discipline was a bright spot in the administration of Lopez Obrador, which has frequently buffeted markets with surprise policy decisions.