By Isabel Woodford and Anthony Esposito
MEXICO CITY (Reuters) -Mexico’s financial system has a resilient and solid position, the country’s central bank said on Wednesday during the launch of its financial stability report, adding that certain vulnerabilities and risks seen during the pandemic have eased.
Banxico, as Bank of Mexico is known, said “commercial banks have capital and liquidity levels well above regulatory minimums” in its biannual report.
The results of stress tests show that the “capitalization index of banking institutions in Mexico would allow the system, at the aggregate level and in the six scenarios considered, to conclude the simulation with levels well above regulatory minimum, including capital buffers,” Banxico said.
However, Banxico underscored that Mexico is facing a “more complex and uncertain environment” characterized by high inflation, deteriorating growth prospects, and tight global financial conditions.
Banxico also warned of the possibility of a greater tightening of global financial conditions, lower-than-expected global economic growth, a further weakening of aggregate demand, and further downgrades to Mexico and state oil company Pemex’s credit ratings as risks to financial stability.
(Reporting by Isabel Woodford and Anthony Esposito, Editing by Alistair Bell)
