Javier Guzmán Calafell: New challenges for central banks in Latin America

Remarks by Mr Javier Guzmán Calafell, Deputy Governor of the Bank of Mexico, at a seminar organized by the Central Reserve Bank of Peru and the Interamerican Development Bank, Cusco, Peru, 25 July 2017.

The views expressed in this speech are those of the speaker and not the view of the BIS.

The central banks from emerging market economies (EMEs) have faced a challenging external environment in recent years. The monetary policies implemented by the advanced conomies after the global financial crisis, combined with episodes of turbulence in highly integrated international financial markets deriving from a combination of factors, have resulted in substantial volatility of capital flows. In addition, EMEs have confronted a world economic environment characterized by lower rates of global potential growth, a decline in commodity prices, a growing anti-globalization sentiment and events of a geopolitical nature. The combination of these factors has led to a situation of acute uncertainty. If this were not enough, the global financial crisis has eroded confidence on our understanding of the economics science and of the proper way to implement monetary policy under current circumstances.