Herrera will maintain Mexico’s economic policy

Significance

Urzua’s abrupt departure is the most high-profile that AMLO has experienced in his seven months in office.

Impacts

• The peso will be volatile for some time but a tight monetary policy should avert any long-term depreciation due to Urzua’s resignation.
• His resignation deprives the government of an individual trusted by the markets to contain the government’s most statist members.
• Herrera is known to favour lower interest rates, but there is no expectation that he will put undue pressure on the Bank of Mexico.