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Mérida.- The Secretary of the Treasury, Rogelio Ramírez de la O, ruled out that Mexico faces financial risk systemic, due to the recent bankruptcies and the collapse of the share value of some banks in the world.
He argued that neither the Bank of Mexico lent itself to the game of lowering its rates excessively, nor did the central government take cheap debt taking advantage of the low rates, beyond what Congress approved.
“Yes, the big countries have a problem to solve, the credibility of the central banks has to be restored,” he stated in an interview with Enrique Quintana, president and director of El Financiero.
Why are the central banks in the world in crisis?
He explained that the large central banks opened the floodgates and They gave all the liquidity in the world, they plummeted the steel rates, and they maintained them for almost ten years like this or more every ten years, and the fiscal authorities of those same countries, which also opened the floodgate of fiscal spending, it is a serious problem that they have to deal with, but Mexico don’t have this problem.
“Mexico is in another orbit, first we are very experienced in handling the blows of big crises, we did it successfully in the late 80s in the Asian crisis, true, this meant enduring volatility for as long as it lasts, both in exchange rates as in rate, but we are convinced that we are with the correct fundamentals, we did it successfully in 2008 when we got a very big blow from the US mortgage crisis and we did it successfully in 2015 with the candidacy of Donald Trump that also caused very high waves in the markets”, he emphasized.
He added that in all instances Mexico has endured because the foundations of the economy are well structured; The authorities are convinced that we are right and that is why we can get around it.
“Our message for the Mexican financial system and for savers is that we are doing things right,” he stressed in the framework of the 86th Banking Convention.
Should we worry about the bank crisis?
questioned if you shouldn’t worry Because an episode like Silicon Valley or Credit Suisse occurs in Mexico with a banking institution or with an intermediary, he replied that there is no need to worry about systemic contagion.
“I do not doubt that a Mexican bank has links with one of these troubled banks in the United States or in Europe, but The entire Mexican system is not with these problemsthe Mexican financial system is on good internal foundations over capitalized, it could even be criticized for being too cautious but not for being overextended”, he stressed.
He acknowledged that the rate hike will have an impact on public finances, but it is a cost that is being absorbed within the budget and what is approved by Congress.
“We are absorbing it within the same budget line, it is well absorbed within the balance sheets of the degree of maneuver that the fiscal authority has and we are also taking forecasts. The Undersecretary of Revenue in various instances has taken coverage, has made self-financing or renewal of financing strategically and to that extent the impact has been somewhat reduced, but we cannot cover the sun with one finger, it is hitting us, “he accepted.
He explained that Pemex is in a well-ordered medium-term transition program, in the sense that not everything can be resolved in the short term.
“Compared to 2019 and 2020 it is in a much better situation; It has a very high debt, but it has not aggravated it because it has not taken on new debts, it has also done so within its budget margin and with that we are more than well served, knowing that it is a situation that has to move more through the legal system , supplier accounts, liquidity indices and establishment of a good management identity before the market and before the rating agencies”, he replied.
On the other hand, he commented that the revision of Mexico’s GDP growth goal will be done with the latest data prior to the date on which the Pre Criteria of Economic Policy for 2024 are sent to Congress.
