Former finance minister Carlos Urzúa speaks as Mexican President Andres Manuel Lopez Obrador looks in Mexico City, Mexico in February 2019. Picture: REUTERS/HENRY ROMERO
Former finance minister Carlos Urzúa speaks as Mexican President Andres Manuel Lopez Obrador looks in Mexico City, Mexico in February 2019. Picture: REUTERS/HENRY ROMERO

Mexico City — Arturo Herrera was nominated as Mexico’s finance minister after Carlos Urzúa abruptly quit over policy differences in the first major cabinet resignation for President Andres Manuel Lopez Obrador. The nation’s currency and stocks tumbled.

The peso lost as much 2.3% following the announcement of Urzúa’s resignation, only to pare its loss after AMLO, as the leftist president is known, said Herrera,  the finance undersecretary, is his choice for successor. It fell 1.4% to 19.1878/$  at 12.26pm in Mexico City.

“He is not happy with the decisions we are taking,” Lopez Obrador said about Urzúa in a video on Facebook, standing alongside Herrera after the minister’s resignation.

“As this is a change, a transformation, sometimes people don’t understand we can’t continue with the same strategy. We can’t put new wine in old bottles.”

Urzúa has been a long-standing ally of Lopez Obrador, being his finance secretary when AMLO was mayor of Mexico City at the start of the last decade. Herrera is also a former finance minister of the nation’s capital.

“There have been many discrepancies in economic matters,” Urzúa wrote on a Twitter post, adding that decisions by Lopez Obrador’s government on matters of public administration have lacked foundation.

“I’m convinced that economic policy should be based on evidence, considering the various effects it may have and free from all extremism, whether from the right or left.”

The nomination of Herrera will not  change economic policy in a significant way, according to Barclays.

“AMLO was calling shots and will continue to do so,” said Marco Oviedo, chief Latin America economist for Barclays. “The letter is showing that the administration is not as clean as it is intended to be.”

With assistance from Cyntia Barrera Diaz and Michael O’Boyle.

Bloomberg