Mexico gets new central bank chief

MEXICO CITY: Mexico’s president named US-trained policymaker Alejandro Diaz de Leon to head the central bank, a figure analysts said would likely continue the hawkish policies of widely respected incumbent Agustin Carstens.

Carstens, who led the Bank of Mexico for nearly eight years, is leaving on December 1 to head the Bank for International Settlements in Switzerland, dubbed the ‘central bank of central banks.’

News of his departure had rattled the markets, as he was seen as a steady hand at the tiller – weathering the global financial crisis and Donald Trump’s election as US president, which battered the Mexican peso because of his threats to scrap the North American Free Trade Agreement.

But Diaz de Leon, currently Carstens’s deputy governor, is seen as a choice of continuity.

The 47-year-old economist, who has a master’s degree in public policy from Yale, first joined the central bank in 1991, and has also worked at the finance ministry and Mexico’s development bank for international trade, President Enrique Pena Nieto’s office said in a statement.

He will be tasked with taming inflation that currently stands at 6.37 per cent, well above the bank’s target range of two to four per cent.

To calm inflation the bank has aggressively raised the key interest rate, which currently stands at seven per cent.

The Eurasia Group consultancy said ahead of the appointment that Diaz de Leon would be a safe bet, predicting “probably no change in the bank’s policy stance.” — AFP