Javier Guzmán Calafell: Monetary policy amidst Nafta negotiations and other sources of uncertainty

Remarks by Mr Javier Guzmán Calafell, Deputy Governor of the Bank of Mexico, at the European Economics and Financial Centre's Distinguished Speaker Seminar, London, 9 July 2018.

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

Central bank speech  | 
19 July 2018

I am very honored for the opportunity to participate in this Seminar and to address such a distinguished audience. You will not be surprised if I say that I am also very impressed by the venue. The Palace of Westminster is not only one of the most beautiful sites in the United Kingdom, but also a revered symbol of history and democracy. I thank the European Economics and Financial Centre, and especially Professor Hannah Scobie, for the invitation to take part in this event, and Baroness Gloria Hooper for kindly agreeing to chair it.

I will concentrate my remarks on monetary policy in Mexico, with a special emphasis on the environment of uncertainty that has been affecting us for several years already and on one of its main ingredients, the renegotiation of the North American Free Trade Agreement (NAFTA).

The Banco de México's primary mandate, enshrined in the country's Constitution, is to seek the stability of the purchasing power of the national currency, that is, a low and stable inflation. This is based on a wide body of evidence leading to the conclusion that this is the best contribution that a central bank can make to a country's growth and well-being. To this end, the conduct of monetary policy in Mexico rests at present on three main pillars which, although mutually reinforcing and therefore complementary, have been sequentially erected through efforts made over the course of several decades.