The Day at a Glance | December 21 2021

The Top

*Macroeconomic stability is the recipe against external shocks: Alejandro Díaz de León, Governor of the Central Bank of Mexico.

*Omicron could reduce global economic growth in half in the 4Q21: Bloomberg.

*Inflation could remain high for a longer period of time: Peter Kazimir, member of the ECB.

Economic environment

The transition in Banxico begins. In an Interview with The Economist, Governor of the Central Bank of Mexico Alejandro Díaz de León assured that macroeconomic stability in the country is fundamental in order to face global risks that are on the horizon in 2022. He considered that healthy public finances, a monetary policy focused on the stability of prices, and a strong financial system are some key points to ensure in 2022, a year that will still be complicated due to the pandemic`s effects – as well as monetary normalization among advanced economies. For Díaz de León, it`s important that the country`s monetary policy is successful in avoiding the exchange rate from magnifying inflationary risks that could come from within. The interest rate has been key in maintaining a stable exchange rate this year and contributes to reduce inflationary risks, he assured. This is an important factor that must be considered while making monetary policy decisions in an environment in which U.S. monetary normalization will contribute to higher volatility to global financial markets. The Governor`s message was made public a few days before his departure from the central bank – Victoria Ramírez Ceja will take over. Díaz de León confirmed that they are already working together and having meetings and conversations to ensure that the transition in Banxico is smooth. Victoria Ramírez Ceja will lead the central bank now, and will have to face a complex global environment and considerable inflationary risks in which guaranteeing macroeconomic stability and Banxico`s independence will be key.