Banxico’s Reserve decreases consistently in the year

For the first time in two years, the international reserves of Banco de México, which guarantee liquidity in dollars to respond to external shocks, registered a decrease.

Information from the Bank of Mexico shows that reserve assets stood at 199.183 million dollars at the cutoff of December 23, a figure that is below the 202.399 million dollars registered in the last week of December last year.

Thus, the information from the central bank shows that in the course of these twelve months, they have been reduced by 3,216 million dollars.

In the same period of 2021, the international reserves of Banco de México had accumulated an increase of 6,606 million dollars, mainly as a result of the deposit of Special Drawing Rights (DEGs) made by the International Monetary Fund (IMF) which, by agreement of the member countries, it allowed central banks to strengthen their response capacity to external shocks. In fact, statistical information from Banco de México shows that as of December 24, 2021, international reserves had a balance of 202.273 million dollars.

A year earlier, in 2020, the reserves registered a historical accumulation of 14.730 million dollars, the result of the important purchase of dollars made during the year by Petróleos Mexicanos (Pemex) and the Federal Government, in accordance with the Bank Law. central. At the same cutoff on December 24, reserve assets totaled a balance of 195.479 million dollars.

volatility against

The stock of international assets has presented a consistent decrease since the beginning of 2022, mainly due to the change in the valuation of assets and other non-detailed operations.

As explained by the Banco de la República de Colombia last week, international volatility has had a significant impact on the utility of the instruments in which international reserves are deposited.

The diagnosis that economists from the International Monetary Fund (IMF) have regarding Banco de México’s reserve assets, is of a healthy position and maintains in a special analysis that a reduction in reserves may be associated with higher spreads.

The founding director of the Institute for the Americas at George Washington University, Alejandro Werner, recently explained that the balance of the reserves can be described as a healthy and high amount that operates as a financial hedge.

lose in gold

Detailed information from Banxico shows that 86.6% of Banxico’s reserve assets are deposited in foreign currency reserves in convertible currencies. 7.6% of the total is in SDRs, which are reserve assets owned by each IMF member country and which are under the custody of the International Organization.

3.1% is deposited in gold, in gold swap; and the rest in other unspecified reserve assets.

ymorales@eleconomista.com.mx