The man who has been one of the central architects of Mexico's economy for nearly a decade unexpectedly resigned today as the peso continues to depreciate and fears grow that the coming Trump government could push the country into recession.
Central Bank director Agustin Carstens announced today that he will leave his post on July 1 to head the Bank of International Settlements (BIS) in Switzerland. His sudden resignation announcement seems to be injecting additional uncertainty into the economy at a time when Mexico is already preparing for shocks from the U.S. possibly pulling out of NAFTA, withdrawing investment, and imposing trade tariffs under Trump.
Carstens, an acclaimed economist who formerly served as finance minister under the administration of President Felipe Calderon, was one of the public officials who most inspired confidence in the embattled government of President Enrique Peña Nieto. He is largely credited with helping to lower inflation and navigating the Mexican economy through the global financial crisis of 2009.
President Peña Nieto has yet to announce Carstens' successor, but whoever he taps will have big shoes to fill.
Some speculate Carstens is leaving the Central Bank ahead of the approaching storm, and as the country loses space to maneuver against the Trump government.
Peña Nieto’s economic reforms have not produced the expected results and the opening of the country’s oil sector has fizzled as global oil prices collapse.
Carstens’ resignation follows that of former Finance Minister Luis Videgaray, who stepped down in September after facilitating what many Mexicans saw as a disastrous meeting in Mexico City between President Peña Nieto and then-candidate Donald Trump.
Now there are rumors Videgaray, Peña Nieto’s erstwhile righthand man, could be coming back into the fold to help the president establish a good channel of communication with the Trump team.
But the resignations and reshuffling of Peña Nieto’s economic Cabinet are making Mexicans increasingly nervous at a time of impending uncertainty.