BANXICO Circular 29 – Modifications to Rules to Cover Liquidity Needs

July 17, 2020 – On the Circular 29/2020, Banco de México, considering that, on the one hand, the corporate debt market in Mexico faces an environment derived from the COVID-19 pandemic in which cautious conditions in the financial markets and the perception of a higher risk of Credit continues to prevail, the operating conditions of the fixed income market remain stressed and the primary market for corporate debt has been limited by the conditions of uncertainty and risk caused by the aforementioned pandemic and, on the other hand, a decrease is still observed. In the operation and liquidity in the secondary market of long-term corporate debt, it has been resolved that it is convenient to expand the scope, as well as reduce the cost of operations that credit institutions can carry out with the Central Bank under the “Rules applicable to corporate securities operations with Banco de México to cover liquidity needs”, so that, through these operations, the primary placement of national corporate debt can be favored and reactivate a fundamental channel for the granting of credit in the economy, as well as generate the additional benefits derived from greater dynamism in the debt market.

Jurisdictions affected: Mexico

For more information, visit Banco de México.

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