AMLO Assails Mexico Central Bank for Failing to Share Windfalls

Mexican President Andres Manuel Lopez Obrador criticized the central bank for failing to send the government its windfalls from a foreign exchange surplus while saying he backs the institution’s autonomy.

Lopez Obrador was riled after the bank in April used the profits obtained as a result of last year’s currency moves to settle internal finances. Meanwhile, at least one bank board member has criticized the president’s administration for boosting financial support for state oil firm Petroleos Mexicanos.

AMLO Assails Mexico Central Bank for Failing to Share Windfalls

“Those in the bank don’t see us in a good way,” Lopez Obrador, known as AMLO, said at a daily press conference on Thursday. “In the past administration, surpluses were sent, and now they aren’t.”

A spokesman for the central bank declined to comment on AMLO’s statements when contacted by Bloomberg News.

The monetary authority previously said the peso’s rally at the end of 2020 eliminated any surplus, as the appreciation reduced profits from its dollar-denominated reserves. The bank, known as Banxico, is legally required to first use the surplus to pay down debts and bolster its reserves, but it has some leeway over what funds can be sent to the government.

Political Motives

In his remarks, AMLO singled out Governor Alejandro Diaz de Leon, whose term ends this year and would be up for an extension, for alleged affinity with members of the previous government.

While the president still has to decide on his candidate for the next Banxico term, some analysts see AMLO’s stance as a sign Diaz de Leon won’t continue in the top post.

“This year is definitely the last year for Diaz de Leon. He is out,” said Marco Oviedo, chief Latin America economist at Barclays Capital Inc., who expects Finance Minister Arturo Herrera to replace him.

In his remarks, Lopez Obrador said the monetary authority should be more transparent over the costs and benefits of its international reserves, but repeatedly emphasized his respect for its independence.

The comments on the bank’s independence reassured BNP Paribas economist Pamela Diaz Loubet, who said the president “has been quite emphatic on respect for Banxico’s autonomy.”

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