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Dissenting Opinion From Board Member Espinosa On Forward Guidance

MEXICO
  • Dissenting opinion on the monetary policy statement from board member Irene Espinosa:
  • “Communication is a fundamental pillar of monetary policy. In recent years, our central bank has introduced changes and made significant progress in this field. Nevertheless, these have been mainly implemented on a case-by-case basis, according to circumstances, and, on occasions, without previously discussed guidelines. Such is the case of forward guidance. Its purpose is to aid in the formation of expectations aligned to the long-term view of monetary policy, which is conditional on available information, to enable an orderly adjustment of financial markets. However, the forward guidance proposed in this policy statement is limited only to the upcoming decision and omits communicating that we anticipate that the monetary policy stance must remain restrictive for 2 years in order to achieve convergence to the 3% exact target. This reinforces a very short-term view, inevitably partial and incomplete, that does not fulfill the purpose of contributing to the formation of expectations for the horizon in which monetary policy operates. For this reason, I reiterate the urgent need to evaluate our communication policy.”
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