(Bloomberg) -- Mexican President Andres Manuel Lopez Obrador surprised listeners on Thursday when he blurted out the central bank's decision to raise interest rates hours before the official announcement was due.
While it was the first time in the central bank's history that the hidebound monetary institution had its decision preempted by the president, it certainly wasn't the first time his daily press conferences have stirred controversy.
The revelation on Thursday prompted swift criticism from economists who raised concern about the independence of Banxico, as the bank is known. Though traders mostly took comfort in the fact that the 50 basis point rate hike was unanimous, driving the currency to the highest in about six months.
AMLO, as the president is known, later apologized for the blunder, saying he thought the decision had already been made public. But bombshell revelations have become a pattern for Lopez Obrador, 68, especially during his daily two-and-a-half hour briefing with reporters, known in Spanish as the mananera that is broadcast widely and streamed online.
His unscripted morning conferences, where he's prone to go off on hour-long tangents and pick fights with journalists and business executives, has helped him influence the daily news cycle and burnish his man-of-the-people image. But speaking for hours on end, and sometimes at more than one event, hasn't always worked in his favor.
Surprise Nomination
Lopez Obrador recently lashed markets with an impromptu nomination change for the governor of the central bank in late November, only weeks to go before a new chief needed to be installed.
The peso slumped after he said at his press event that he was switching his choice from his former finance minister, Arturo Herrera, to his spending chief, Victoria Rodriguez, who had little monetary policy experience at the time. She has since worked to build her inflation-fighting credentials.
Read More: AMLO Throws Mexican Peso Caution to Wind with Banxico U-Turn
Pemex Buyback
AMLO preempted another key event in September when he announced that he wanted to use part of the $12 billion from a larger share of special drawing rights from the International Monetary Fund to reduce state-owned oil giant Pemex's $115 billion debt burden.
But by touting how he planned to use the funds, he pushed up the value of the very debt he sought to purchase, undermining his decision to aid the producer. He later acknowledged he'd raised the cost of the transaction by talking about it, and the buyback hasn't happened to date.
Read More: Mexican President Talks Up the Very Bonds He Plans to Buy
Central Bankers, Regulators
The leader caught investors off guard in May by saying he wouldn't tap Alejandro Diaz de Leon for a second term as Banxico governor and sought an economist with a “social dimension,” raising questions about the future of the bank's heavy focus on fighting inflation.
Read More: AMLO Denies Banxico Governor a New Term, Wants Social Focus
Beyond markets, AMLO has unabashedly lashed out against independent institutions like the nation's election and antitrust regulators, and its transparency agency. Which is why his apology to the central bank was so out of character.
His off-the cuff style has led to comparisons with former U.S. President Donald Trump.
“People are learning to live with AMLO's comments like they did with Trump,” said Daniel Rico, a currency strategist at RBC Capital Markets in New York. “But these kind of actions will continue to hinder investor confidence.”
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