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The Banco de Mexico needs to preserve its sole mandate to fight inflation, Arturo Herrera, Mexico’s outgoing finance minister and the president’s pick to next lead the country’s central bank, said in an interview with El Pais.
Herrera, whom President Andres Manuel Lopez Obrador has tipped to succeed Alejandro Diaz de Leon at the end of the year, said efforts by central banks to foster growth can be a mistake in emerging markets.
“I am convinced that a central bank like Mexico must have a sole mandate,” Herrera told El Pais. “It has not been sufficiently understood that reaching stable inflation also indirectly helps growth.”
Mexico’s central bank surprised economists last month by raising interest rates after inflation in Latin America’s second-largest economy quickened to around 6% in early June, driven by fuel and food prices.
Lopez Obrador jolted markets in late May by saying he would replace Diaz de Leon with an economist with “a social dimension.” Herrera told El Pais he had a good relationship with investors and that the central bank could work to promote wider financial inclusion in Mexico while focusing on price stability.
Herrera is set to be replaced in the coming days by Lopez Obrador’s long-time economic adviser and ally Rogelio Ramirez de la O.
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