Banxico

Thailand, Indonesia and India have all made bullish noises of late, suggesting they may raise rates in the near future.

Indonesia’s central bank governor said today that it remained vigilant against rising inflationary pressures, which is good to know from a bank that has been keeping at least one eye firmly on growth. Consumer price inflation rose to 6.96 per cent in the year to December, against a 2011 target of 5 per cent +/- 1 per cent. The central bank has kept rates at their post-crisis low of 6.5 per cent to drive growth via commercial loans, Reuters reports. The IMF has called on the country to raise rates, which recently cut import duties on food to try to dampen price rises.

India is expected to raise rates next Tuesday, January 25. A “vast majority” of Read more

Simone Baribeau

No relationship other than that they both reported February consumer prices today and in both cases, government price controls affected inflation.

Inflation in Venezuela subsided in February, falling to 1.6 per cent, its lowest level in 11 months. That is, of course, the monthly rise, annualised inflation rose some 24.7 per cent. The lower price increases were due to smaller increases in the cost of food, communication, education and alcohol and tobacco. Read more

The Mexican central bank has held the interbank interest rate at 4.5 per cent, as expected. Inflation is above target and rising, at an annual rate of 4.46 per cent for January. In its press release, the monetary policy board said action may be taken to achieve the target inflation rate of 3 per cent by the end of next year*.

*NB. This was translated using Google translate – no English version is yet available

Simone Baribeau

I called the end too soon. The Argentine central bank fiasco has clearly outlived Martín Redrado stepping aside. In an unexpected twist, a presidential ally was chosen to head the country’s central bank.

From tomorrow’s paper… Read more

By Adam Thomson, Mexico correspondent

The new head of Mexico’s central bank has promised closer co-operation with the government will underpin his six-year tenure, a move likely to heighten investor concerns about his institution’s independence. Read more

The Mexican central bank kept the target for the overnight interbank funding rate at 4.5 per cent, as expected, hoping to target inflation of 3 per cent by the end of this year. The decision was the first under new bank governor Agustin Carstens.

Simone Baribeau

The Senate has confirmed Agustín Carstens, Mexico’s finance minister, as its next central banker, less than a week after Mexican President Felipe Calderón nominated him to the post.

Mr Carstens will take the post on January 1. His confirmation comes the day after Standard and Poor’s downgraded Mexico’s government debt to BBB, highlighting concerns on the country’s diminishing oil production prospects and expectations for weak overall growth. Read more

Agustin Carstens has advocated the continued independence of Mexico’s central bank, and promised greater openness and transparency to the senators who will vote to ratify his nomination as chief. The incumbent, Guillermo Ortiz, will apparently stop chairing the Bank of International Settlements if – as looks likely – he leaves the Bank of Mexico. Carstens is a likely replacement. Does anyone know what Ortiz will do?

Mexico has just been downgraded to BBB from BBB+ by Moody’s, following a similar downgrade by Fitch on November 23. Read more

Adam Thomson of the Financial Times writes about the political implications of Mexico’s newly nominated central bank governor Read more

The Mexican president has named finance minister Agustín Carstens as the next central bank governor. Ernesto Cordero, who until this week headed Sedesol, the country’s social development ministry, will take over from Mr Carstens. Insiders say that the move also allowed Mr Calderón to install another confidante in a key ministry – an emerging pattern not lost on political analysts – in the form of Mr Cordero. 

Read more at ft.com