Prudence is the new rule
The deputy governor of the Bank of Mexico, Galia Borja Gómez, sent a clear message from the Banking Convention: calm and constant evaluation. Faced with the new risk scenario represented by the conflict in the Middle East, caution is not an option, it is an obligation.
“Personally it seemed appropriate to me because we have been there for a short time and all the authorities are evaluating because every day the story changes in terms of time and duration,”
he said, referring to Federal Reserve chief Jerome Powell’s cautious tone. The uncertainty about how long this geopolitical tension will last is precisely the greatest challenge.
Decisions on a knife edge
Borja Gómez was forceful about the Banxico process. There is no script written for this play. Each council meeting is a unique event, where all the information available up to that precise moment is analyzed.
“Decisions are made at the time of the meeting and between one meeting and another we evaluate all the available information”,
he explained. The so-called ‘monetary pause’ that could be discussed next week is not a fait accompli. It is a possibility that is weighed minute by minute.
The final message is one of transparency in uncertainty. They recognize the risk, admit that it is new and make it clear that there is no defined position. The global board changes quickly, and Banxico does not want to move a piece without seeing the whole picture. Patience, for now, is your main strategy.
