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The News
Friday 18 of September 2020

Mexico's Foreign-Exchange Reserves Show Weekly Decline


Agustin Carstens Carstens, Governor of the Bank of Mexico,Photo: Cuartoscuro/María José Martínez
Agustin Carstens Carstens, Governor of the Bank of Mexico,Photo: Cuartoscuro/María José Martínez
Holdings of foreign currencies by the central bank declined by $11 million last week

Last week, Mexico’s foreign-exchange reserves declined by $11 million to $177.7 billion, said the Mexico’s Central Bank (Banxico).

According to the account balances of those holdings, the contraction of foreign-exchange reserves this week resulted from the purchase by the federal government of $15 million from Banxico, of which only $4 million could be returned, due to changes in the dollar’s value.

Although the reserves did show moderate reduction this week, they still have positive growth since the beginning of 2016, when the figure was $176.7 billion.

Banxico said that the previous week, the monetary base, which includes all currency in circulation as well as commercial banks’ deposits in the central bank, had increased 5 billion pesos ($289.2 million), reaching a total of 1.2 trillion pesos, implying an anual variation of 15.5 percent and a decline of 41.9 million pesos so far in 2016.

Also in the previous week, Banxico carried out open market operations with various banks to offset a net increase in liquidity of 40.8 billion pesos.

The foreign-exchange reserves, together with the Flexible Credit Line granted to Mexico by the International Monetary Fund, constitutes more than $200 billion worth of assets, which the government could use as a financial shield in times of crisis.

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