For the first time since 2016, Banxico will deliver a remainder of its operation to the Ministry of Finance due to the depreciation of the peso, and it will be for 110,000 million pesos, according to the Banamex analysis area.
This resource would be used by the government to reduce the broad public deficit, which is why the financial group estimated in a report published this Wednesday that it will now be at 4.2% of GDP, from the previous 4.5%.
However, he noted that it would not imply lower spending by the federal administration, and therefore did not modify his forecast for the Mexican economy this year, of just 0.2%.
He recalled that the Federal Budget and Fiscal Responsibility Law states that the remainder of Banxico’s operations must be allocated at least 70% to the amortization of the public debt, or to the reduction of the amount of financing necessary to cover the budget deficit.
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He added that the remaining amount should be used to strengthen the Budget Revenue Stabilization Fund, or to increase assets that strengthen the government’s financial position.
Banamex noted that the exchange rate had a strong depreciation of almost 23% between the end of 2023 and the end of 2024.
He explained that a depreciation of the peso against the basket of currencies that make up Banxico’s international reserves implies a higher valuation in pesos of the stock of those central bank assets, which is called exchange gain.
He clarified that there are other factors that determine the existence or absence of carryovers, so a depreciation of the peso during the fiscal year does not necessarily translate into a surplus.
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But the financial group concluded that there will be a remainder of fiscal year 2024 when making estimates about Banxico’s financial results, which include operating expenses and amortization of losses from previous years.
He recalled that the organic law of Banxico indicates that if there is a remainder, the delivery will be made no later than April of the year immediately following the one in which the surplus that would have been obtained corresponds.
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