Banks of Mexico say they are prepared to lower interest rates

Banks of Mexico say they are prepared to lower interest rates

The new administration of the Association of Banks of Mexico (ABM) chaired by Julio Carranza Bolívar urged the Bank of Mexico (Banxico) to continue controlling inflation since the union is willing to lower its interest rates as soon as the central bank lowers your reference rates.

“It is very important to continue the crusade to control the inflationwe must manage to lower it as soon as possible so that it does not affect Mexicans, especially those who have less,” said Carranza Bolívar.

“The banks We are united in this effort in view of the rise in interest rates To contain inflation, the banks have increased the rates of their products to a lesser extent and are ready to lower them as soon as the reference rate of the Bank of Mexico does so,” he added.

The ABM representative announced that between 2023 and 2025 banks will be focused on reducing transaction costs hand in hand with greater digitization and increasing the granting of credit.

Bank credit in Mexico is mainly intended for companies

For the first time in the country’s history, credit to the private sector reached 40% of the Gross Domestic Product in 2022.

In this context, he highlighted that for the first time in the country’s history, credit to the private sector reached 40 percent of the Gross Domestic Product in 2022, however it remains well below other nations such as Colombia, which reaches a rate of 54 percent. percent of GDP, Brazil with 70 percent or Spain 109 percent.

“There has never been more credit in Mexico (but) this percentage is low when we compare it with other countries, there is still a long way to go,” he said.

In addition, he clarified that of 100 percent of bank credit, practically half goes to companies, 40 percent to families, and 10 percent to the government sector.

But although the companies are the ones who receive the most credit and despite the fact that they contribute to 8 out of 10 jobs in Mexico, it turns out that the smallest ones only have 15 out of every 100 pesos of credit.

The reason for this situation is that SMEs tend to have a short credit history and higher credit risk, many of which are even in the informal economy.

Despite this, the ABM promised that SMEs have access to more credit in the coming years.

“Promoting digital financial services and the use of electronic means of payment instead of cash will not only reduce transaction costs but will also promote the formalization of the economy and the favorable conditions that this brings for families.”

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