Site icon Latin america News

AMLO’s government runs out (again) without remnants of Banxico

AMLO's government runs out (again) without remnants of Banxico

Remnants are resources that come from the positive balance resulting from the operations carried out by the central bank. Based on these movements, a cut is made at the end of the year and delivered to the Federal Treasury.

By law, 70% of the remainder must be used to pay debt and 30% to the budget revenue stabilization fund.

An important factor, which helps to convert said remainder into a profit, is the revaluation of the amount of international reserves produced by the depreciation of the peso. The remainder is calculated once the central bank’s annual operating balance is closed, so the amount of the remainder is not known until after the end of the year”, explained Alfredo Coutiño, director for Latin America at Moody’s Analytics.

In 2021, the federal government also did not have a remnant from the central bank due to the performance of the exchange rate in the previous year: “Derived from the applications described to the result of the year 2020, in accordance with the provisions of the Law of the Bank of Mexico, no it was not possible to allocate resources to the asset revaluation reserve, nor was there an operating surplus,” reported Banxico on April 23 of that year.

The Undersecretary of Finance, Gabriel Yorio recognized earlier that there would be no remnants by the central bank.

“We are not expected to receive remnants and it is not the expectation of the federal government that there are remnants or that they be transferred to the budget, even the budget does not consider any of these funding lines and we do not expect there to be remnants,” he said at a press conference. Friday.

Source link

Exit mobile version