Dec 12, 2020

Dec 12 2020, 11:50 PM December 12 2020, 11:35 PM December 12 2020, 11:50 PM (Bloomberg) -- One company would be the main beneficiary of contentious legislation to force the central bank to buy potentially dirty dollars from Mexican banks, a deputy central bank governor sai... (Bloomberg) -- One company would be the main beneficiary of contentious legislation to force the central bank to buy potentially dirty dollars from Mexican banks, a deputy central bank governor said on Saturday. “There are quite a few arguments against the reforms to the Banco de Mexico law. One of the most important is that it is not worth reforming a law to favor a single company, especially one with a negative record with the U.S. SEC,” Banco de Mexico deputy governor Jonathan Heath said on Twitter. Heath didn’t immediately respond to a request for further comment, but appeared to be referring in his tweet to the business empire of billionaire Ricardo Salinas Pliego, Mexico’s third richest man. Salinas de-listed his companies Elektra and TV Azteca from U.S. markets in 2005 while facing fraud charges brought by the U.S. Securities and Exchange Commission that he later settled without admitting wrongdoing. ”You can not assume it is us. These, again, are suppositions,” Grupo Salinas spokesman Luciano Pascoe said by text message in response to a question from Bloomberg News. He added that Salinas had expressed his position on the law in a blog post. “We have a positive view of the law, we don’t take responsibility for it.” Read More: Mexico Billionaire Supports Forcing Central Bank to Buy Dollars Banxico Governor Alejandro Diaz De Leon warned lawmakers Friday that its ties to the U.S. Federal Reserve could be disrupted by the legislation. “The agreements entered into with foreign monetary and financial authorities in which Banxico participates could be put at risk,” Diaz de Leon said in a plea to halt approval of the bill in testimony before the Lower House finance committee. The bill was approved by the Senate late Wednesday after lawmakers from President Andres Manuel Lopez Obrador’s Morena party ignored concerns raised by the central bank. The bill would force the central bank to buy U.S. cash that local banks can’t unload elsewhere. Questioned by a lawmaker, Diaz de Leon said the problem of excess dollars was a major issue for just one Mexican institution and not a widespread problem for banks. During the debate on the senate floor Wednesday, a senator said the bill had been pushed by Grupo Salinas. Banco Azteca is part of Elektra, the flagship company of Salinas Pliego, which owns the country’s No. 2 TV network TV Azteca as well as privately owned cable TV, energy and security companies. During the testimony, opposition lawmakers said the reform was a serious threat to the central bank’s autonomy, and could fill its coffers with illicit funds. Even voices within the president’s own party want to hold off a vote on the bill, which could happen as soon as Monday ahead of the end of the legislative session on Tuesday. Alfonso Ramirez Cuellar, a former top Morena lawmaker who served as interim party leader during a leadership dispute, said the bill required a national debate. “It is an extremely important issue and therefore cannot be passed on the fast track,” Cuellar said on Twitter . “The legislative branch must safeguard the functions of the the Banco de Mexico and avoid risks of contamination in the foreign exchange system.” ©2020 Bloomberg L.P.