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© Reuters. Mexico’s Central Bank Governor Victoria Rodriguez Ceja poses for a photo after an interview with Reuters at the annual banking convention, in Acapulco, Mexico March 25, 2022. REUTERS/Javier Verdin/File Photo
MEXICO CITY (Reuters) -Mexico’s financial system is standing strong and unwavering despite the challenging global environment, according to Bank of Mexico Governor Victoria Rodriguez on Wednesday.
The financial stability report from the bank highlighted the resilience of the banking system in Latin America’s second-largest economy, showcasing its strength in solvency and liquidity through stress tests.
“The banking system’s robust liquidity position puts it in a good position to withstand episodes of stress that exceed those seen in the past,” said Banxico, the central bank.
Rodriguez also addressed inflation projections, stating that the bank has accounted for an anticipated 20% increase in the minimum wage to approximately $14.41 per day from January.
The bank is closely monitoring prices and has indicated that it may consider discussing a reduction in its historically high interest rates early next year if inflation continues to decrease as expected, with January data being particularly significant.
Banxico noted that the “financial position of households” has slightly decreased compared to the previous report from six months ago. It also mentioned that credit growth for the non-financial private sector, although still substantial, has slowed down.
Despite a slight uptick, consumer bank credit delinquency remained low, according to the report.
The report identified potential risks to Mexico’s financial stability, such as a further slowdown in the global economy and unexpected downgrades of the country’s sovereign debt or state oil firm Pemex.
Banxico also highlighted the risks associated with cyber-attacks stemming from conflicts in Ukraine and the Middle East, and announced that it will maintain its cyber alert level at “yellow.”