Russia’s invasion of Ukraine, as the main reason, has caused the losses registered in the retirement fund administrators (afores) to accumulate 253.443 million pesos at the end of the first quarter of the year, according to data from the National Commission of the Retirement Savings System (Consar).
To put it in perspective, the registered handicaps are greater than the 238,014 million pesos allocated to the Pension for the Welfare of Older Adults program for this year.
In January, the Afores reported capital losses of 136.575 million pesos; in February they were for 25,316 million; in March capital gains of 48,000 million pesos were recorded and in April there were again losses of 139,553 million pesos.
The Commission revealed that the armed conflict in Europe has repercussions on the world economy, such as the exposure of the international financial system and foreign companies, directly or indirectly, to the Russian economy and the interconnection of many entities to assets and liabilities subject to sanctions.
“These capital losses have been caused by uncertainty among investors due to a greater perception of risk derived from various events that have caused volatility in the markets,” argued Consar.
In this regard, Carlos Ramírez, former president of the Consar, explained that the losses do not increase, “the value of the instruments in which the Afores have invested the savings decreased, but it is not a loss.”
“Tomorrow you are not going to sell the bond you have now at a loss, the Afores are holders of firm hands. The bond that lost temporary value is still valid, the loss is not executed until you sell the instrument, if you do not sell it you have the disability on paper, not in money”, commented the also Integralia consultant.
For the former public official, this moment of volatility is a great moment for the Afores to go out and buy Udibonos or M Bonds and wait for extraordinary returns, thinking about the future.