Measures by the Treasury to Ensure Economic Stability
The Secretariat of Finance and Public Credit (SHCP) has launched three initiatives to ensure the stability of financial markets, focusing on strengthening the Budgetary Revenue Stabilization Fund (FEIP), managing debts, and introducing a hedging program. The first action was the capitalization of the FEIP, “achieved through an orderly close of the 2024 fiscal year and a placement strategy that prioritized fixed-rate, long-term debt instruments.” Additionally, this financing strategy reduces the sensitivity of financial costs to episodes of volatility and increases in interest rates in financial markets, according to a statement from the SHCP.
The second measure aims to improve the debt maturity profile. On January 31, a refinancing operation took place involving 185 billion pesos, which strengthens the public debt portfolio for 2025 and the following years. Total demand reached 273 billion pesos, and the average term of the refinanced debt was extended by 2.14 years. In this operation, 185.6 billion pesos in debt instruments such as Cetes, Bondes F, Bonos M, and Udibonos with short maturities scheduled for 2025 (79.3 billion), 2026 (44.4 billion), and between 2027 and 2029 (61.9 billion) were repurchased. “These actions establish the foundation to guarantee the stability of financial markets during the current year,” the department added. The third measure involves the implementation of a hedging program through derivative financial instruments, which helps mitigate risks in adverse market situations. It is estimated that, over the medium term, these hedges will reduce volatility by 0.33 percentage points of GDP, considering a negative scenario in the 95th percentile, according to insights from the department led by Rogelio Ramírez de la O, who recently had a conversation with investors to provide them certainty regarding potential 25% tariffs that the United States could impose on Mexico.
The measures adopted by the Treasury are essential to safeguard economic stability in a context of global uncertainty. It is important to maintain a focus on diversifying funding sources and proactive risk management, which not only ensures the country’s fiscal health but also generates confidence among investors. In finance, effective risk management and transparency can be the pillars that support sustainable long-term growth.
