November 28, 2017 / 11:39 PM / 2 years ago

Mexico names Diaz de Leon to replace Carstens as central bank chief

MEXICO CITY (Reuters) - Mexico’s president on Tuesday named former finance official and central bank board member Alejandro Diaz de Leon to take over as the head of the central bank, to replace outgoing chief Agustin Carstens.

Mexico's President Enrique Pena Nieto (R) shakes hands with newly appointed Central Bank Governor Alejandro Diaz de Leon at Los Pinos presidential residence in Mexico City, in this handout photograph released to Reuters by the Mexico Presidency, November 28, 2017. Mexico Presidency/Handout via REUTERS

President Enrique Pena Nieto’s office said in a statement that Diaz de Leon had been designated to see out the remainder of Carstens’ second term, from Dec. 1, 2017 to Dec. 31, 2021.

Diaz de Leon is currently a member of the five-strong board of the bank and was one of the favorites to replace Carstens, who is stepping down on Nov. 30 to take charge of the Bank for International Settlements (BIS) in Switzerland.

Carstens, one of the world’s most respected central bankers from an emerging market economy, originally planned to leave early this year but agreed to stay on through November after the peso sank to a record low on concerns U.S. President Donald Trump could end a free trade deal with Mexico.

An unexpected jump in inflation in early November cast a shadow over Carstens’ final days in office.

Economists and fund managers said that Diaz de Leon was respected both at the central bank and by investors.

“He is a very balanced person who does not hesitate to change his views when circumstances change. We cannot label him as being a hawk or a dove,” said Credit Suisse economist Alonso Cervera.

Diaz de Leon, 47, was ratified by the Senate last December to replace inflation hawk Manuel Sanchez on the central bank board and his nomination to now lead the bank will not require another vote by lawmakers.

Following Carstens’ exit, Pena Nieto will need to name a new member of the board.

Before joining the board, Diaz de Leon had run the government’s export bank Bancomext from 2015 until late last year, and before that served as the head of the finance ministry’s public debt office.

He was a key figure in selling Pena Nieto’s economic reform agenda in 2013 and 2014 to global investors.

A Reuters poll in February found economists thought Diaz de Leon was the most likely replacement for Carstens.

The poll also found that Miguel Messmacher, a finance ministry deputy, was considered the mostly likely person to be named as the new fifth member of the board.

Reporting by Frank Jack Daniel and Michael O'Boyle; Editing by Tom Brown and Rosalba O'Brien

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