AP

Mexican president admits he broke law by revealing rate hike

Mar 25, 2022, 1:58 AM | Updated: 1:59 pm

MEXICO CITY (AP) — Mexican President Andrés Manuel López Obrador acknowledged Friday that he broke the law when he announced a day earlier that Mexico’s central bank was increasing its prime interest rate from 6% to 6.5%.

The Bank of Mexico is officially independent of the president, and is supposed to make its own decisions on rates and money supply without interference.

Shortly after the president announced the rate hike, the bank issued a formal statement detailing the increase.

There is little possibility the president could face charges; he wasn’t in the meeting of the central bank, whose proceedings are supposed to be kept secret. The treasury secretary in Mexico is invited to the meetings, and López Obrador said he got the information from him.

But speaking to bankers late Thursday, López Obrador said, “I want to offer an apology to the central bank governor and the assistant governors.”

“I thought the information had already been made public when I spoke about the issue. But I want to tell you I reaffirm my commitment to respect the independence of the Bank of Mexico,” the president said.

He repeated that acknowledgement at his daily news conference on Friday and accepted that it violated the law.

The president has been accused of toying with the central bank’s independence before.

In 2020, López Obrador’s Moren party raised a storm of criticism by proposing legislation that would force Mexico’s central bank to be buyer of last resort for all the U.S. cash that enters the country.

The Bank of Mexico and opposition groups expressed concern such a requirement would violate the bank’s autonomy and also leave it open to acquiring dirty cash from drug cartels. The bill did not advance in Congress.

Central banks throughout the world try to avoid leaking decisions on interest rates and other matters because advance information could give currency traders or others an unfair advantage in the market.

Mexico granted independence to the central bank in 1994, when the peso crisis made it clear that previous administrations had not been sufficiently transparent about the country’s debt.

Gabriela Siller, the director of economic analysis for Banco Base bank, said any further leaks “would significantly erode confidence in Mexico, because one of the pillars of that confidence is precisely the independence of the central bank.”

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Image:The New York Giants' Willie Mays poses for a photo during baseball spring training in 1972. M...

Associated Press

Willie Mays, Giants’ electrifying ‘Say Hey Kid,’ dies at 93

Willie Mays, whose singular combination of talent, drive and exuberance made him one of baseball’s greatest players, has died. He was 93.

1 day ago

Image: This photo provided by the Washington Department of Ecology shows a derailed BNSF train on t...

Associated Press

Judge orders BNSF to pay Washington tribe nearly $400M for trespassing with oil trains

BNSF Railway must pay the sum to a Native American tribe in Washington after it ran 100-car trains with crude oil on the tribe's reservation.

2 days ago

Photo: In this photo provided by Tieanna Joseph Cade, an amusement park ride is shown stuck with 30...

Associated Press

Crews rescue 28 people trapped upside down high on Oregon amusement park ride

Emergency crews in Oregon rescued 28 people after they were stuck dangling upside down high on a ride at a century-old amusement park.

2 days ago

juneteenth shooting texas...

Associated Press

2 killed and 6 wounded in shooting during a Juneteenth celebration in a Texas park

A shooting in a Texas park left two people dead and six wounded, including two children, on Saturday, authorities said.

3 days ago

Photo: Israeli soldiers drive a tank near the Israeli-Gaza border, in southern Israel, Wednesday, J...

Jack Jeffery, The Associated Press

8 Israeli soldiers killed in southern Gaza in deadliest attack on Israeli forces in months

An explosion in Gaza killed eight Israeli soldiers, the military said Saturday, making it the deadliest attack on Israeli forces in months.

4 days ago

Juanita Beach Kirkland...

Kathy McCormack and Nick Perry, The Associated Press

‘Tis the season for swimming and bacteria alerts in lakes, rivers

With summer about to start, many people flocking to their favorite swimming holes may also want to read up on bacteria warnings.

5 days ago

Mexican president admits he broke law by revealing rate hike