| | |  Business News | December 2009 
Carstens Says Willing to Head Mexico Central Bank
 Jason Lange - Reuters
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December 02, 2009
| | Mexican Finance Minister Agustin Carstens | |
Mexico City - Mexican Finance Minister Agustin Carstens said on Tuesday he would be willing to head the central bank when Gov. Guillermo Ortiz's term ends this month.
Carstens has been mentioned by investors and economists as the most likely candidate to lead the bank if President Felipe Calderon does not renominate Ortiz, who clashed with Calderon last year on interest rate policy.
"I'm here to help the president, and if he wants me to go to the Banco de Mexico, I'll do it," Carstens said in an interview on Mexican radio station Radio Formula. Carstens said Calderon was still mulling his decision.
Removing Ortiz, who is well liked on Wall Street after aggressively fighting inflation over the last decade, would likely be seen by investors as damaging to the central bank's independence.
Calderon criticized the central bank last year for keeping interest rates relatively high despite an inflation rate in Mexico that was similar to that of the United States.
A few weeks later in June 2008, the central bank started raising rates even as the economy slipped toward recession.
The rate hikes of 2008 showed Ortiz would not bow to political pressure and Calderon's administration later said it would respect the central bank's independence.
Carstens said Calderon's eventual decision would be "aimed at strengthening the Banco de Mexico as an institution."
"I am sure that will be his position," he said.
Last week, Calderon said Ortiz has done "good work," but would weigh all the "pros and cons" before deciding whether to nominate him for another term.
Ortiz has not said publicly whether he wants to stay on for another term. Any nominee must be approved by the Senate.
Ortiz has run the central bank since 1998 and has overseen a fall in inflation from 15.3 percent to as low as 2.9 percent in 2005. Consumer prices rose 4.5 percent in the 12 months through October 2009.
The bank is widely expected to raise rates next year to fight inflation, which is seen rising due to higher taxes recently approved by Congress.
The bank left its benchmark overnight rate steady last week at 4.5 percent at its last scheduled monetary policy decision of the year and possibly the bank's last decision under Ortiz.
(Editing by James Dalgleish)
jason.lange(at)thomsonreuters.com
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