For the sixth year in a row, the federal government ran out of operating remnants of the Bank of Mexico (Banxico). This as a result of the losses of 743 million pesos that Mexico registered in the 2021 financial year.
In the financial statements of the central bank, audited by an external auditor (KPMG), they explain that Banxico registers losses when the peso appreciates with respect to the currencies in which the reserve of international assets is invested.
“The result of the 2021 exercise corresponded to a loss of 743 million pesos, for which there were no resources to constitute capital reserves nor was there a remnant of operation to deliver to the federal government,” they highlighted.
Banxico’s operating surplus is an accounting gain from exchange rate variations obtained at the close of the fiscal year. Utility that was not recorded in 2021, for the sixth consecutive year.
As the central bank is not a for-profit financial institution, as stated in article 55 of the Law of the Bank of Mexico, “it must deliver to the federal government the full amount of its operating surplus once the planned reserves have been constituted. in this Law”.
And as stated in the same Law, if the current fiscal year, which is 2022, the valuation of assets in pesos increases due to depreciation and the Bank of Mexico obtains enough profit, it will have to use a part to compensate the losses. of this year.
insufficient depreciation
As explained on his official twitter account, Julio Santaella, an economist at Banxico, when the central bank handed over operating remnants to the federal government, two events coincided: the central bank’s net result for the year exceeded 200,000 million pesos and the exchange rate has depreciated more than 10% from end to end.
The detailed information in last year’s financial statement shows that Banxico’s stockholders’ equity amounted to 53,361 million pesos, which is a quarter of the balance that historically favors generating enough profit to transfer remnants to the federal government.
Meanwhile, the peso completed an annual slide of 3.01% against the dollar, which is almost a third of the depreciation that, in the Mexican experience, allows increasing the positive balance. This means that during 2021, Banxico received fewer pesos for each unit of foreign currency invested in the reserve.
Banxico’s portfolio
The financial statement details the net asset position of foreign exchange and metals in which the reserve assets invested during 2021.
Thus, 92% of the total portfolio was in US dollars and the rest was in 10 foreign currencies, Special Drawing Rights (SDR); gold and silver. The exchange rate against the dollar was 20.46 pesos per greenback, as of December 31, 2021.