(Recasts with comments on prices, growth)
By Dave Graham and Stefanie Eschenbacher
ACAPULCO, Mexico, March 21 (Reuters) - The head of Mexico's central bank said on Thursday monetary policy is best suited to targeting price stability, not growth and employment, underlining the bank's core mandate in the face of a government eager to explore new approaches.
Banco de Mexico Governor Alejandro Diaz de Leon told a conference that upholding the central bank's independence was crucial for the country's economic health, and forcefully argued in favor of keeping inflation as its key focus.
President Andres Manuel Lopez Obrador, a leftist, assumed office in December after a landslide election victory, pledging to overhaul the economy from the bottom up.
His finance minister Carlos Urzua said during the election campaign that the Lopez Obrador team wanted new faces on the central bank board to bring fresh perspectives.
Since taking power, the new government has appointed two members to the bank's five-person board, sparking concern it could seek to reshape policy.
One of the new members, economist Gerardo Esquivel, has previously raised the question of whether the Banco de Mexico should adopt a dual mandate to promote growth as well as low inflation, and argued for more diverse board views.
Speaking in the Pacific beach resort of Acapulco, Governor Diaz de Leon said that at the end of the 20th century, many nations that lacked a "suitable framework" for their central banks attempted to use monetary policy to "directly promote growth".
This, Diaz de Leon argued, had caused economic setbacks and fanned inflation.
"Both historical experience and empirical evidence show irrefutably that monetary policy influences the long-term inflation trajectory, while it is clearly ineffective at influencing growth and employment in the long term," he said.
Diaz de Leon also reiterated that Lopez Obrador's decision in late October to cancel a partly-built new Mexico City airport had fanned market volatility in Mexico, as had the predicament of state oil firm Pemex, which is heavily indebted.
Since then, volatility had receded, partly due to external factors, but also thanks to the government's promise to post a primary budget surplus of 1 percent of gross domestic product this year, he added.
Price trends were consistent with inflation reaching the bank's target rate of 3 percent by the first half of 2020, Diaz de Leon said.
The governor reaffirmed the importance of the bank's autonomy, which he said should be regarded as a "precious public good". (Reporting by Dave Graham; Editing by Sandra Maler and Richard Borsuk)