MEXICO CITY – Mexico’s President Andrés Manuel López Obrador on Wednesday appointed his Finance Minister to head the central bank and chose a close ally to lead the Finance Ministry and help it realize its vision of an economy. fairer during the last half of his term.
López Obrador said on Twitter that Finance Minister Arturo Herrera would replace Banco de México president Alejandro Díaz de León, whose term ends at the end of 2021.
To replace Herrera, López Obrador chose economist Rogelio Ramírez de la O, who will be the third finance minister since the president took office in December 2018.
Ramírez faces the challenge of revitalizing the economy after two difficult years for López Obrador, whose efforts to strengthen state control of sectors such as energy were undermining business investment even before the coronavirus pandemic.
Still, fueled by huge US stimulus spending, the economy is expected to rebound strongly this year as the president nears the middle of his six-year term.
In a video posted on social media to signal the changes, López Obrador promised to boost social spending, while Ramírez said he would maintain budget discipline and prioritize Mexico’s poor.
“We will continue to behave responsibly, without indebting the country, without spending more than we earn, with honesty and austerity,” said López Obrador.
Ramírez, educated at the National Autonomous University of Mexico and the University of Cambridge, is a longtime adviser to López Obrador and was his choice for finance minister when he first ran for president in 2006, an election he lost by little.
Herrera said he would retire in mid-July and vowed to defend the central bank’s independence. He has recently defended himself against efforts by Congress to modify his functions and the criticisms of López Obrador.
“It is very clear what role I will assume if the Senate ratifies me, and the importance of defending the autonomy of the Bank of Mexico, and I think the president understands that,” Herrera said during an interview on Mexican radio.
Jorge Gordillo, an economist at CI Banco, said Herrera’s nomination was good news as he had an established track record.
“Herrera is seen as a technical person. Know the markets; it is respected, ”he said. “But we don’t know how much Herrera will be the president’s man at Banco de México.”
Luis Gonzali, co-director of Franklin Templeton Investments in Mexico, said Herrera would likely show more independence at the bank than at the ministry. He noted that other López Obrador nominees to the Banxico board had not submitted to his will.
Díaz de León was appointed to head the central bank during the previous government. López Obrador, who regularly criticizes his predecessor, made it clear that he saw those ties as a problem and promised to choose a successor who would support “moral economy.”
Herrera, a former World Bank executive, took over as finance minister in July 2019 when his predecessor resigned after being frustrated by the drift of politics.
Under López Obrador’s auspices, Herrera managed tight budgets as minister and managed to maintain relatively strong tax collections during a prolonged phase of weak economic growth.
Mexico’s economy entered a mild recession during López Obrador’s first full year in office and suffered a drop of 8.5% during 2020 when the pandemic took hold.
While trying to prop up the economy, Herrera has been confronted with trying to help state oil company Petróleos Mexicanos (Pemex), which is losing and heavily in debt. López Obrador has made the reactivation of Pemex a top priority.
To improve the efficiency of the company, Ramírez is known to be an advocate for the simplification of Pemex’s corporate structure, which over time has been divided into several companies. (Reporting by Dave Graham; Additional reporting by Sharay Angulo, Abraham Gonzalez Anthony Esposito and Frank Jack Daniel; Edited by David Gregorio)