(Bloomberg) -- Jonathan Heath is ready to liven up the stuffy world of Mexico's central bank.
The economist tipped by President-elect Andres Manuel Lopez Obrador as his first board nominee doesn't wear neckties and has no plans to start now.
Things he does intend to do: keep his personal Twitter account (where his photo shows him with a Negroni -- his favorite cocktail -- while puffing a cigar); continue writing his Reforma newspaper column; and avoid events he can't reach via Mexico City's ubiquitous Ecobici bike share. Heath, who says he takes a balanced, data-driven view of monetary policy, also wants the bank to be more accessible to the public and its decision-making more understandable.
Heath is a break from the more buttoned-up men who serve on the board (Irene Espinosa this year became its first-ever woman member). Led by Alejandro Diaz de Leon, they almost always wear ties, and none keeps a Twitter account. Heath, who spent more than three decades as an independent economic researcher and at firms including HSBC Holdings Plc, has little experience at the central bank or in government aside from a few years at the budget office in the early 1980s. The other members of Banco de Mexico's board have all spent years at the bank or in government.
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"We have to improve communication, transparency and to explain to people why rates are going up," Heath said over breakfast near his home in Mexico City. "The reports that the central bank publishes are for people who are ‘initiated,' for people who already know. But there's nothing there for normal people."
Banxico, as the central bank is known, on Thursday kept its key rate at 7.75 percent, more than double the level of late 2015, when concern about U.S. policy shifts under Donald Trump should he become president fueled a plunge in the peso and surge in consumer prices. Looking ahead now -- with the U.S., Canada and Mexico having just forged the USMCA agreement -- Heath expects policymakers to cut borrowing costs starting next year given the outlook for slowing inflation and growth.
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Heath's style is also in keeping with the man nominating him. Lopez Obrador, since winning election July 1, has traveled around Mexico City in a Volkswagen Jetta and said he plans to forgo the traditional trappings of the presidency, including an armed security detail and government airplane. He preaches austerity, although that image was partially undermined this week after photos from the lavish wedding of one of his closest advisers were splashed across the cover of society magazine "Hola!"
Given that Lopez Obrador has made efforts to demonstrate his respect for the central bank's autonomy, one of Heath's greatest assets may be that he didn't have strong ties to the leftist former mayor, nor to any of the other presidential candidates, such as former Finance Minister Jose Antonio Meade.
Heath said that when incoming Finance Minister Carlos Urzua spoke with him about the job, he told him that he wasn't interested in whether Heath was a hawk or a dove, which Heath took as a sign that the new administration wants to ensure the central bank's independence from politics.
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The 63-year-old, who holds a doctorate in economics from the University of Pennsylvania, said that he is a "lifelong Banxico watcher." Banco de Mexico's key rate is 5.5 percentage points higher than the Fed, down from the 6 points earlier this year that was the most since 2009. "Banxico has sufficient maneuvering room to reduce by 1 to 1.5 points the differential with the Fed," Heath said
Eurasia Group said in a research note that Heath allows Lopez Obrador to change the traditional academic and technocratic composition of the board and bring in new voices and perspectives, without endangering investor confidence.
"The business community knows him well enough to feel comfortable," Eurasia analysts including Daniel Kerner wrote.
An adviser for a number of foreign banks and funds, Heath is well recognized in the Mexican financial industry. During a trip to New York last month, Mexican Economy Minister Ildefonso Guajardo, the nation's chief negotiator for the USMCA, called him a "great economist."
"Maybe there are things I want to do and I won't be able to achieve," Heath said. "Perhaps I will enter and I will find some rigidities that will block me, but at least I will try to maintain my personality. That's how I am."
--With assistance from Daniela Guzman.
To contact the reporter on this story: Eric Martin in Mexico City at emartin21@bloomberg.net
To contact the editors responsible for this story: Vivianne Rodrigues at vrodrigues3@bloomberg.net, ;Carlos Manuel Rodriguez at carlosmr@bloomberg.net, Robert Jameson
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