Omar Mejía’s BANXICO Nomination Is Unexpected: Analysts

The Ministry of Finance nominated the adviser to the Bank of Mexico (BANXICO) Omar Mejía Castelazo as the institution’s new deputy governor, an unexpected choice to replace Gerardo Esquivel, analysts say.

SHCP’s nomination is “a real surprise,” according to Gabriella Siller, Director of Economic Analysis, Grupo Financiero BASE. “Everything seems to point that he has the credentials to be [at BANXICO], so that is one uncertainty solved for the board. The fact that he was an advisor to the board will make the transition much easier because he has experience in monetary policy,” she told El Financiero.

Mejía has advised BANXICO’s five-member board since 2019. Previously, he worked as deputy treasurer for the federal government and headed Mexico City’s financial administration office, said SHCP. Mejía was not among the initial lists of possible candidates to replace Esquivel as deputy governor of BANXICO, but his nomination is now headed to the Senate for approval.

Mejía, an economics graduate from UNAM, has “a solid academic foundation and extensive experience to fulfill this responsibility,” said SHCP. From December 2018 to March 2021, the years in which President Andrés Manuel López Obrador cemented his administration’s social programs, Mejía was deputy treasurer of the Federation, which is in charge of the Interbank Electronic Payment System (SPEI).

Mejía will likely have a less moderate approach than Esquivel and “will probably be more in line with the board’s current vision of keeping BANXICO’s credibility as an inflation-fighting central bank,” said Gabriel Casillas, Head of Latin America Economics, Barclays.

Esquivel, who was no longer backed by López Obrador’s administration after his fourth year as deputy governor of BANXICO, had regularly called for less aggressive interest rate hikes than the rest of the board, reported El Financiero. In December 2022, Esquivel voted to lower the rate of monetary adjustment while the rest of the board backed an increase.

BANXICO Rejected Over Half of Requests to Increase Commissions in 2022

In Mexico’s financial system, industry players must request BANXICO to approve changes regarding the commissions they charge to users. In 2022, regulated financial companies presented a total of 3,213 requests to BANXICO to increase commissions in their existing financial products, from which 1,868 were rejected by the body, according to the latest Annual Report on Compliance with the Law for Transparency and Regulation of BANXICO’s Financial Services.