Bank of Mexico: Historical Evolution, Monetary Policy Transformations, and Digital Challenges

Abstract

This article analyzes, from an institutional historical perspective and using a deductive method, the trajectory of the Bank of Mexico throughout its one hundred years of existence, identifying the transformations in its objectives, instruments, and scope within national monetary policy. It starts with the hypothesis that the central bank played a decisive role in financing economic growth during most of the 20th century, particularly during the period of stabilizing development, integrating its monetary decisions with fiscal and industrial policies. However, following the crisis of the 1970s and 1980s and under the influence of neoliberal paradigms, its role was reoriented toward price stability, consolidating its autonomy with the constitutional reform of 1993 and adopting the Inflation Targeting regime in 2001.

The study reviews its origins in 1925, its consolidation as the sole issuer of currency, its role in the industrial expansion of the mid-century, and the tensions arising from macroeconomic imbalances that led to a change in approach. Macroeconomic data are examined shows a shift from development-oriented policies to an orthodox model with limited results in terms of economic growth. Finally, it addresses an emerging phenomenon: central bank digital currencies (CBDCs), highlighting international experiences and the Bank of Mexico's preliminary analysis of a possible “digital peso.” The study concludes that, although inflationary stability has been achieved, the central bank's capacity as a promoter of economic development remains limited, posing new technical, regulatory, and operational challenges in the digital age.