Acapulco.- If there is consensus between financial authorities, private institutions and political actors on something, it is that separation must be respected that the Constitution provides between the Executive federal and the Bank of Mexico (Banxico) autonomous.
It is important to respect the autonomy of the central bank to maintain the certainty and confidence of the national and international financial markets in the country.
This Friday, almost at the beginning of his message at the 87th Banking Convention in this port of Guerrero, the candidate to the Presidency of the Republic of the Let’s Keep Making History coalition, Claudia Sheinbaum, said she was committed to respecting the autonomy of Banxico.
“What is our vision? We are going to respect the autonomy of the Bank of Mexico, which I know you are interested in this topic“(In addition) we are going to maintain the financial stability and financial responsibility of the current government,” said the presidential candidate from Morena, PT and the Green Party.
When presenting his vision of the country’s future to the bankers, Sheinbaum guaranteed that “gasoline or energy prices will not increase in real terms, and (…) we will maintain a reasonable balance between debt and gross domestic product. “It is not going to increase the deficit, nor the debt significantly.”
Then the same candidate asked “where there can be additional resources without the need for a tax reform, which if it had to happen it would have to be by consensus.”
He immediately responded that “first of all, with the digitalization and simplification of the national tax system, we had a great experience, although at another level in Mexico City, of digitalization of the processes in the city, which allowed us to increase the city income, and we need to further simplify the SAT through technological innovation and simplified regimes.”
He then said that President López Obrador “increased customs revenue by practically 200 billion pesos and the modernization of customs will allow us to still have an additional increase in revenue.”
Earlier, his opponent in the presidential race, the candidate of the Force and Heart coalition for Mexico, Xochitl Galvezpresented some of his proposals on economic matters in the same banking forum, where He did not refer specifically to the central bank.
However, I affirm that “I will lead a coalition government, which will respect the Constitution, international treaties, laws and the institutions”.
The standard bearer of PAN, PRI and PRD said that “I am greatly concerned about the deterioration of public finances. They ran out of money on projects that have had legitimate questions and huge cost overruns.
Gálvez emphasized that “2024 will be the year with the largest deficit in the last 35 years” and described as “inadmissible the amount of resources that have been allocated to Pemex without having positive results.”
In the afternoon, during the closing session of the Banking Convention, five months after concluding his administration, the president López Obrador pointed out that “us we have been respectful(and) we will continue to be respectful of the Bank of Mexico, of the autonomy of the Bank of Mexicoof their policies.”
AMLO said that “due to these policies, inflation is controlled with other actions that we have carried out.”
Reiteration more than necessary before a president who says he is committed to respecting the autonomy of Banxico, but that He has not missed the opportunity to criticize his decisionsin addition to the fact that during his administration there have been attempts to violate the independence of the central bank.
This year marks 30 years since the ‘new’ Bank of Mexico Law came into force to turn it into an autonomous institution that independently conducts its monetary policy to permanently fight inflation.
At a time when the country faces pressure on public finances due to fiscal expansion plans for this year, respect of the government to the autonomy of Banxico can serve as a counterweight to fiscal policy decisions.
When many central banks are subject to political pressure to cut their reference rates, it is best to move away from a binary view of Banxico’s autonomy.
Autonomy is not binary. You have it and that’s it.
