LatinFinance - September/October 2013 - 26

SCORECARD
CENTRAL
BANKS

Latin America’s central banks have had a tough year navigating volatility amid
slowing growth, falling currencies and capital outflows. Over the past year,
Mexico stands out for its handling of the challenges. By Karen Schwartz

Steady hand

entral banks in
latin america have not had it easy over
the past twelve months. for the first half
of that period, authorities took action
against rampant capital inflows, sharply
appreciating currencies and, in some cases,
overheating economies.
US federal Reserve chairman Ben
Bernanke ended that when he hinted in
may that the central bank might roll back
its bond buying program before year-end.
this triggered a dramatic sell-off in global
emerging markets.
for policymakers, the risk framework
was suddenly flipped. latin currencies
weakened sharply. this coincided with
weaker growth in china, which was already
weighing on commodity prices and GDP
projections, especially for latin america’s
natural resource exporters.
Yet, broadly, latin america’s central
banks had ample room for maneuver,
having managed the post-crisis recovery
for the most part with aplomb. adapting
was perhaps easier for many of the region’s
better performers, thanks to years of sound
policy management.
LatinFinance’s annual evaluation
of central banks in latin america and
the caribbean considers precisely that
performance in the face of a rapidly
changing environment, both domestically
and externally. it zeroes in on the conduct
of monetary policy, but also considers
currency and international reserves
management as well as the transparency,
independence, consistency and foresight of

26 l atinfina nce.com - September/October 2013

©REUTERS

C

CAREFUL COMMAND: Mexico’s central bank
has managed inflation expectations well
under governor Agustín Carstens

the region’s central banks.
it considers the performance of
institutions against their peers between
august 2012 and July 2013. the final
decision is made by the editors of
LatinFinance, but is also based on extensive
feedback from industry experts and
analysts.
the Bank of mexico is our central
Bank of the Year, having topped our 2013
scorecard. it moves up a place from last
year’s survey where it came second to
colombia.
Under governor agustín carstens,
Banxico has stayed ahead of the curve
on monetary policy, skillfully managing
inflation expectations and demonstrating
considerable foresight in its decisions, says
alberto Bernal, head of research at Bulltick

capital markets.
the bank surprised markets with rate
cuts in march and September this year
totaling 75 basis points. it cited slowing
economic indicators and expectations that
inflation would trend towards the target
rate of 3%.
“even though the central bank had
telegraphed it could make a move, some
in the market were skeptical they would
pull the trigger,” says alonso cervera, chief
economist for non-Brazil latin america at
credit Suisse, regarding a 50 basis point cut
in march.
not everyone was happy about it at the
time.
“When we all wanted them not to cut
rates, they cut rates, because they saw that
the economy was weakening and inflation


http://www.LATINFINANCE.COM

LatinFinance - September/October 2013

Table of Contents for the Digital Edition of LatinFinance - September/October 2013

Latin Finance - September/October 2013
Contents
Front notes
People news
Debt news
Equity news
M&A news
After the storm
Advantage Mexico
Treading water
New structures
Mexico
Regaining the Initiative
Deficit Ahead
Building up
Switching Course
Brazil
Work in progress
Extreme makeover
Mind the gap
Brazilian life insurance
Andean
Breaking the fall
Reaching out
Market movers
Paraguay
Smoothing the cycles
Thinking big
Parting Shot
LatinFinance - September/October 2013 - Latin Finance - September/October 2013
LatinFinance - September/October 2013 - Cover2
LatinFinance - September/October 2013 - Contents
LatinFinance - September/October 2013 - 2
LatinFinance - September/October 2013 - 3
LatinFinance - September/October 2013 - Front notes
LatinFinance - September/October 2013 - 5
LatinFinance - September/October 2013 - People news
LatinFinance - September/October 2013 - 7
LatinFinance - September/October 2013 - Debt news
LatinFinance - September/October 2013 - 9
LatinFinance - September/October 2013 - Equity news
LatinFinance - September/October 2013 - 11
LatinFinance - September/October 2013 - M&A news
LatinFinance - September/October 2013 - 13
LatinFinance - September/October 2013 - 14
LatinFinance - September/October 2013 - 15
LatinFinance - September/October 2013 - 16
LatinFinance - September/October 2013 - 17
LatinFinance - September/October 2013 - 18
LatinFinance - September/October 2013 - 19
LatinFinance - September/October 2013 - 20
LatinFinance - September/October 2013 - 21
LatinFinance - September/October 2013 - 22
LatinFinance - September/October 2013 - 23
LatinFinance - September/October 2013 - After the storm
LatinFinance - September/October 2013 - 25
LatinFinance - September/October 2013 - Advantage Mexico
LatinFinance - September/October 2013 - 27
LatinFinance - September/October 2013 - Treading water
LatinFinance - September/October 2013 - 29
LatinFinance - September/October 2013 - 30
LatinFinance - September/October 2013 - New structures
LatinFinance - September/October 2013 - 32
LatinFinance - September/October 2013 - 33
LatinFinance - September/October 2013 - 34
LatinFinance - September/October 2013 - 35
LatinFinance - September/October 2013 - 36
LatinFinance - September/October 2013 - 37
LatinFinance - September/October 2013 - 38
LatinFinance - September/October 2013 - 39
LatinFinance - September/October 2013 - 40
LatinFinance - September/October 2013 - Mexico
LatinFinance - September/October 2013 - Regaining the Initiative
LatinFinance - September/October 2013 - 43
LatinFinance - September/October 2013 - Deficit Ahead
LatinFinance - September/October 2013 - 45
LatinFinance - September/October 2013 - Building up
LatinFinance - September/October 2013 - 47
LatinFinance - September/October 2013 - 48
LatinFinance - September/October 2013 - 49
LatinFinance - September/October 2013 - 50
LatinFinance - September/October 2013 - 51
LatinFinance - September/October 2013 - Switching Course
LatinFinance - September/October 2013 - 53
LatinFinance - September/October 2013 - 54
LatinFinance - September/October 2013 - 55
LatinFinance - September/October 2013 - 56
LatinFinance - September/October 2013 - Brazil
LatinFinance - September/October 2013 - Work in progress
LatinFinance - September/October 2013 - 59
LatinFinance - September/October 2013 - 60
LatinFinance - September/October 2013 - 61
LatinFinance - September/October 2013 - Extreme makeover
LatinFinance - September/October 2013 - 63
LatinFinance - September/October 2013 - 64
LatinFinance - September/October 2013 - 65
LatinFinance - September/October 2013 - 66
LatinFinance - September/October 2013 - Mind the gap
LatinFinance - September/October 2013 - 68
LatinFinance - September/October 2013 - 69
LatinFinance - September/October 2013 - Brazilian life insurance
LatinFinance - September/October 2013 - 71
LatinFinance - September/October 2013 - 72
LatinFinance - September/October 2013 - Andean
LatinFinance - September/October 2013 - Breaking the fall
LatinFinance - September/October 2013 - 75
LatinFinance - September/October 2013 - 76
LatinFinance - September/October 2013 - Reaching out
LatinFinance - September/October 2013 - 78
LatinFinance - September/October 2013 - 79
LatinFinance - September/October 2013 - 80
LatinFinance - September/October 2013 - 81
LatinFinance - September/October 2013 - Market movers
LatinFinance - September/October 2013 - Paraguay
LatinFinance - September/October 2013 - Smoothing the cycles
LatinFinance - September/October 2013 - 85
LatinFinance - September/October 2013 - Thinking big
LatinFinance - September/October 2013 - 87
LatinFinance - September/October 2013 - Parting Shot
LatinFinance - September/October 2013 - Cover3
LatinFinance - September/October 2013 - Cover4
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