Banxico's lack of certification of Daz de Len leads to uncertainty and noise in the markets: BofA

Mexico City (Abro). – The statements of President Anders Manuel Lopez Obrador regarding the disbelief of Alejandro Daz de Lynn as governor of the Bank of Mexico (Banxico) generate a state of uncertainty, noise and risk premiums in the financial markets, confirmed by the chief economist of Mexico and Canada at Bank of America (BofA), Carlos Cabestern.

Additionally, the analyst warned that the president’s announcement could scare away investments in the country.

Capistern noted, by participating in a videoconference, the US Engine of the Mexican Economy, organized by the Center for Mexico and the United States Studies and the Mexican Council for International Affairs (Comexi):

“Today an announcement was made, in the morning, that the Governor of the Bank of Mexico, Alejandro Daz de Lynn, will not be certified. I can tell you that there are six months left to make this decision, that is, the governor is there until December, and the issuance of the announcement today generates all this uncertainty about What will happen and the name of the one who will arrive is not mentioned.

In his morning press conference, Pez Obrador said that the next president of the central bank “will be an economist with a social dimension, very supportive of moral economics. He will have a lot of stature, will meet the requirements of his experience in economic and financial affairs and work in a field related to financial management.”

The chief economist at Bank of America also expressed concern about the country’s persistent weak investment.

Remittances are already larger than foreign investment received, I don’t like it; Remittances are that the Mexican produces more in the US and sends us some money; An investment is something that comes so we can produce more and farm more, “he used to do a lot.

Likewise, he said that despite the fact that the agreement between Mexico, the United States and Canada (T-MEC) represents an opportunity to sell to the country, in the context of low interest rates, many investors prefer to automate their operations and relocate to the United States rather than sending their operations to Mexico with cheap labor, Which is a little more normal.

“You have to be careful, because in addition to the opportunities, there are two challenges in the financial and banking side, because the growth of the United States brings a little bit of inflation there and we see a lot of inflation in Mexico and it is possible that inflation gives us higher prices, and interest rates, for 10 years,” he said. In the end, it will bring higher rates in Mexico and that will be a challenge for Mexico, he said.

Finally, he stressed that high interest rates in the United States are not good news for countries with investment flows to emerging countries such as Mexico.