The Faces Behind Latin America's Key Institutions
After years of low global interest rates, a tightening cycle in the U.S. has reverberated around the world and sparked a shift in global monetary policy. In Latin America, central banks’ actions are at the forefront of economic discourse, as policymakers respond to challenges created by the tightening cycle and financial market volatility. Moreover, a busy electoral calendar this year and domestic challenges such as large external imbalances in some economies further complicate policymaking. With monetary policy under the microscope, FocusEconomics Latin America economists provide a snapshot of the main central bank governors across the region and their track records so far.
Ilan Goldfajn, Brazil
Ilan Goldfajn took the reins of Brazil’s Central Bank in June 2016, when the country was in the midst of a deep, albeit abating, recession combined with high inflation. Presiding over a period that saw inflation falling to historically low levels and a gradual economic recovery, Goldfajn earned The Banker's Central Banker of the Year award at the start of 2018. However, since the start of this year, he has faced more challenges and had more mixed results. Despite regular support from the Central Bank, the real has depreciated notably in recent months and stalled government reforms as the election cycle heats up and an economic shock from the truckers’ strike has caused inflation to rise.
- Angela Bouzanis, Senior Economist
Alejandro Díaz de León, Mexico
Given Banxico’s exclusive mandate to keep inflation low and stable, it has long enjoyed a reputation as one of the rare arms-length institutions in Mexico not tarnished by corruption or politics. Even during this year’s raucous elections, presidential candidates committed to the Central Bank’s continued independence. Banxico has been led since last December by Alejandro Díaz de León, a reputable technocrat and one of the most dovish members of the Board of Governors. His appointment was cheered by analysts, given his storied career as a public servant. Despite his dovish stance, however, the Central Bank has recently adopted a more hawkish position in the face of an unprecedentedly volatile election year—reflecting the governor’s commitment to stable inflation. In line with Banxico’s recent rate cuts, inflation has been falling; however, it remains stubbornly high. That said, with less than a year into Alejandro Díaz de León’s four-year appointment, only time will tell if his leadership will bring on-target inflation.
- Christopher Thomas, Mexico Economist
Luis Caputo, Argentina
The current governor of the Bank of Argentina, Luis Caputo, replaced his predecessor in mid-June amid an economic crisis. The Argentine peso was in a depreciation spiral, undermining confidence in the Central Bank. Large budget and current account deficits, double-digit inflation and a sharp contraction of agricultural production due to adverse weather conditions combined to create a perfect storm for the currency. These underlying factors were compounded by an appreciating USD on the back of rising interest rates in the U.S. and reduced appetite for emerging market assets globally.
Caputo, the former finance minister of the Macri government, has so far intensified the restrictive monetary policy, following his predecessor’s path. He oversaw a change in the Bank’s key monetary policy tool in August, although the move did not represent a substantial shift in monetary policy. He has also been monitoring certain monetary aggregates and suggested that the Bank could target them in the future to tame inflation instead of relying solely on interest rates. While it could be a winning move, the new governor needs to secure the confidence of the markets to control inflation. So far it is uncertain if he will be able to do this; however, if so, he will need to establish fluid communication and clearly defined and credible targets.
- Massimo Bassetti, Argentina Economist
Juan José Echavarría, Colombia
Juan José Echavarría’s appointment as governor of Colombia’s Central Bank in January 2017 came at a time when the economy was in the early stages of recovery from the grips of a marked downturn, caused by a collapse in commodity prices, most notably a precipitous fall in oil prices. Since taking the helm, Echavarría has overseen a gradual easing in monetary conditions, which has helped lift economic growth, while inflation has steadily dropped down to within the Bank’s 2.0%–4.0% target range since the beginning of the year. Barring the last three months of 2017, when inflation crept up slightly above the band, Echavarría has kept inflation on target since June 2017. While the economy appears to have turned a corner at the year’s start, with elevated oil prices driving domestic demand, Echavarría is faced with some critical challenges. Persistently weak activity in some sectors, such as construction, are sprouting concerns over the pace of recovery, while risks to the inflation outlook stem from increased volatility in the peso. The peso has lost strength in recent months as rising interest rates in the U.S. have fueled a widespread selloff in emerging market currencies.
- Nihad Ahmed, Colombia Economist
Mario Marcel Cullell, Chile
The governor of Chile’s Central Bank, Mario Marcel, was dealt a more favorable hand than most of his regional peers which has allowed a rather more successful tenure. Thanks to a relatively stable economic environment, the policy rate has been on hold for the past 12 meetings. Inflation, meanwhile, remains largely in check and accommodative monetary policy has helped spur growth. The CBC has also been effective in its forward guidance through its statements, minutes, and monetary policy reports.
- Almanas Stanapedis, Chile Economist
Julio Velarde Flores, Peru
Julio Velarde, the governor of the Bank of Peru, has so far had an impressive tenure, managing to keep inflation under control despite periods of political and economic turbulence. His focus has been on maintaining inflation within the Bank’s 1.0%–3.0% target range, while at the same time guaranteeing financial and foreign exchange rate stability. In 2017, he was notably able to meet the challenges to monetary policy posed by the coastal El Niño phenomenon, which generated a significant supply-side shock to prices. Although this led inflation to climb above the Bank’s target range, Velarde reacted by lowering interest rates in an anti-cyclical move, aware that the effects on prices would only be transitory—which was later proven to be true. As inflation subsequently fell to a multi-year low, he kept cutting rates to stimulate the recovery, something else he seems to have achieved, in view of the latest data on economic activity for the second quarter.
- Massimo Bassetti, Peru Economist
5-year economic forecasts on 30+ economic indicators for 127 countries & 30 commodities.
Date: August 14, 2018
TagsUnited Kingdom Mexico Germany G7 IMF European Union Precious Metals Commodities Spain Base Metals Commodities Cryptocurrency Energy Commodities Inflation Venezuela Canada Agricultural Commodities Sub-Saharan Africa Forex Eastern Europe Oil TPP Brexit India OPEC Banking Sector Exchange Rate Major Economies Colombia Iran Russia Economic Growth (GDP) Commodities Nordic Economies Italy Tunisia Unemployment rate Euro Area France oil prices USA Consensus Forecast Housing Market Australia Turkey Africa South Africa Investment Gold China Vietnam Argentina Latin America Trade Brazil Infographic Company News Greece United States Ukraine Japan Bitcoin UK Eurozone Asia MENA precious metals Emerging Markets Healthcare Portugal
Sub-Saharan Africa 2019 outlook downgraded - https://t.co/FaeLGGIpBz
21 hours ago
We have a brand new webinar in which Senior Economist Angela Bouzanis explains the key risks to the Eurozone's outl… https://t.co/txahwK3MnR
1 day ago
1 day ago
2 days ago
Mexico's short-term growth prospects were bruised in recent weeks by the policy uncertainty surrounding AMLO’s nasc… https://t.co/0JbiJGTTLL
2 days ago
- The Four Financial Bubbles and Their Impact on the U.S. Economy
- The Poorest Countries in the World
- Italy: The sick man of Europe
- What does Bolsonaro's presidential win mean for Brazil's economic outlook?
- The World's Top 10 Largest Economies
- In Latin America, taxpayers are tapped to shoulder the burden of a bank bailout
- How and when will the next financial crisis happen? - 26 experts weigh in
- China and Africa: A partnership under the spotlight
- The conditions are ripe for a Global Financial Crisis 2.0
- Uncertainty, instability and fear haunt a generation of Argentinians
- 5 things: What to expect for Mexico's economy in 2019
- 5 things: Brazil's economic downturn and what to expect going forward
- Emerging Market Currency Crisis: Everything you need to know
- Which ASEAN countries are most exposed in the event of a U.S.-China trade war?
- 75 Top Economics Influencers to Follow
- Emerging Markets Economic Outlook 2018 and 2019
- The Faces Behind Latin America’s Key Institutions
- 2019 Economic Outlook for the Top Oil Producing Countries
- Is your cup of coffee about to get more expensive going in to 2019?
- The Economic Implications of an Aging Global Population
- Can the Wisdom of the Crowds predict the results of the 2018 World Cup?
- Railway Mania: The Largest Speculative Bubble You’ve Never Heard Of
- From Riches to Rags: Have Cryptocurrencies Crashed for Good?
- Investment looks to Latin America, but forecasts are not encouraging
- Turkey: Erdogan has cemented his grip on power - now what about the economy?
- How can Latin America’s business environment benefit from technological change?
- Mexico: A look at the past, present and future as elections yield AMLO victory
- Italy’s New Populist Government and the Eurozone: Prelude to a Crisis?
- Latin America moves toward increased integration as U.S. protectionism grows
- How can Latin America increase productivity without affecting the quality of employment?
- How will Saudi Arabia's economy benefit from lifting the women's driving ban?
- Which countries are the most prepared for the upcoming digital revolution?
- India Under Pressure from the U.S. on Trade Policy
- The Story of Steel
- Latin America is the World Leader in eCommerce Growth Despite Serious Challenges
- What the TPP means for trade in Latin America
- Elections in Russia: Analysis and Implications
- Nearly a Third of Latin Americans Have No Right to a Pension
- A Look at Healthcare Models Around the World
- Newly-elected Chilean President Sebastian Piñera faces a myriad of challenges - economic and otherwise
- The Economic Effects of Trade Protectionism
- Regional Disparity: The Dark Side of Inequality in Latin America
- Coal: The story of the world's most abundant fossil fuel
- Gold: The Most Precious of Metals (Part 3)
- Venezuela's Electoral Conundrum
- Trump's 1st Year: 95 Analysts Surveyed on U.S. Economy
- The Latest on China and What's in Store for 2018
- An in-depth look at the Eurozone’s booming economy and the challenges that lurk in the shadows
- Increasing poverty in Latin America takes a breather thanks to improving economic dynamics
- What will be the most miserable economies in 2018?
- Is Spain doing enough to address its high youth unemployment rate?
- Has Latin America gone far enough in reducing barriers to international trade?
- Commodities Outlook: Oil, Natural Gas, Coal, Lead & Tin
- 21 experts tell us what the future looks like for cryptocurrencies and blockchain
- Turkish lira plummets to all-time low on Erdogan’s monetary feud and tense U.S.-Turkey relations
- Copper: The first metal mastered by man
- The Mercosur-EU Free Trade Agreement: Obstacles & Opportunities
- Nigerian Economy Still Treading Water Thanks to Oil Sector
- Elections in Chile: What the results could mean for the economy
- QE’s Untold Story: A Chart That Fed Correspondents Need To Investigate
- Holland’s fragile one-seat majority government targets economic growth at the expense of fiscal sustainability
- South Africa: Economy at a tipping point?
- Latin American Commodities: What’s behind the increase in demand and prices?
- Is the UK really "shackled to a corpse"?
- Spain-Catalonia: 7 economic experts weigh in on how the situation will affect the outlook
- How well is Spain's labor market doing since the crisis?
- Which countries will have the highest and lowest inflation in 2017?
- How vulnerable is Latin America to economic crises today?
- Iron ore facts and common questions answered
- The bulging economic costs of obesity
- How much investment is needed to salvage Latin America’s crumbling infrastructure?
- A Look at the Potential Impact of Brexit on the Dutch Economy
- Emerging Markets Are Kicking Into Higher Gear In 2017
- Why is foreign direct investment in Latin America falling again?
- Are Central Banks Nationalising the Economy?
- Bounty or burden? The impact of refugees on European economies is far from clear
- What’s the future of U.S.-Latin America trade relations?
- Taxes or cutbacks? Latin America's challenge of sustaining spending without causing debt to skyrocket
- Are uranium prices making a comeback?
- Taxing the Economy: Achieving a Delicate Balance
- How will Latin America’s upcoming lengthy election cycle affect the reform agenda and credit ratings?
- How will emerging market economies perform in 2017?
- Chilean Economy in Focus: Interview with Senior Economist of the Chamber of Commerce of Santiago
- CEOs Rank Top Economies for Growth Opportunities
- The Mobile Ecosystem & Latin America's Economy
- Prospects and Challenges for the Global Economy: Interview with Tim Cooper from BMI Research
- How will the Fed reduce its balance sheet & and how will the ECB end QE? - 19 economic experts weigh in
- Thoughts on "unwinding" QE from Frances Coppola
- The Fed and ECB at a crossroads: Unwinding QE
- Spain: The economy that continues to silence the critics
- Latin America: The Most Unequal Region in the World
- The History of OPEC: Has it been a Success?
- FocusEconomics Announces 2017 Analyst Forecast Awards Winners
- Latin America’s rising unemployment bucks nearly decade long trend
- Escape from the Central Bank Trap by Daniel Lacalle
- China's economic rebalancing act: What to look out for in 2017
- Driving Growth in Latin America: Challenges & Priorities
- Is the Global Economy Rebalancing?
- Commodity exporters face challenging times
- Recent Global Events Facilitate Mercosur-Pacific Alliance
- 23 economic experts weigh in: Why is productivity growth so low?
- Mexico's outlook as Trump nears 100-day mark
- Interview with Oxford Economics Senior Economist on implications of the possible outcomes of the French Presidential Election
- The anxiety of the small saver in a world of negative interest rates
- Brexit negotiations. Between Uncertainty and Urgency
- An Economic History of the EU from El Blog Salmón
- Baby Boomin': Implications of high population growth in Latin America
- Survey of International Economists Predicts a Le Pen Defeat in French Elections, Says Macron has Best Economic Plan
- Spain in a global context: developed economy with some challenges
- How much is crime costing Latin America?
- Predictions & Estimates from Economist Daniel Lacalle
- What economy will the new Dutch government inherit?
- “The data is not a true reflection of reality in India” Interview with Société Générale India Economist
- What are the prospects for Emerging Economies in 2017?
- What to expect in Asia for 2017
- Top Economics & Finance Blogs of 2017
- Latam to Resume Moderate Growth in 2017 but Important Risks Plague Outlook
- 4 Key European Elections That Will Impact the Economy in 2017
- How are security concerns and political chaos affecting Turkey’s economy?
- Global growth to edge up in 2017
- Set to breach targets again? Debt and deficit outlooks for Southern European Eurozone countries in 2016 & 2017
- What does Donald Trump mean for the U.S. economy?
- How will emerging markets perform in 2017?
- The economic impact of a break in U.S.-Philippines ties
- Trump election: Base metals surge due to infrastructure plan
- 5 updates on the Venezuelan economic crisis
- Canada: When your neighbor’s house is on fire…
- Short-term pain before long-term gain? A look at French labor reform and economic growth
- Asia: Unremarkable growth & unfulfilled promises?
- How India's latest monsoon is affecting the economy
- Innovation in Latin America: Potential Goes Untapped Due to Weak Economic Conditions
- Russian economy update in wake of OPEC deal announcement
- The Wisdom of the Crowds and the Consensus Forecast
- Can the peso predict the U.S. election results?
- There's no end in sight to the Venezuela crisis
- A Look at the European Union Political Calendar
- Survey of international economists shows uncertainty surrounding elections damaging U.S. growth prospects
- FocusEconomics partners with leading online statistics provider Statista
- China: Recent postive economic data may be papering over the cracks
- Sub-Saharan Africa's 2016 & 2017 growth rates
- The Italian Dilemma: Weak banks pose risk to already faltering domestic demand
- How much money do migrants from Latin America send home?
- The U.S.' (Not So) Mysterious Case of the Missing Men
- What to expect from the G20 economies by 2020
- The Pain in Spain: Robust GDP growth cannot mask the persistent structural deficit