Mexico | Monthly Report on Banking and the Financial System

Summary

Inflationary persistence could reduce purchasing power to the point of generating changes in consumption patterns, which would negatively influence the demand for bank financing by households and firms, exacerbating the effect of the rise in interest rates.

Key points

• Key points:
• Bank deposits slowed in 2021, following a period of unusual growth driven by the pandemic during 2020.
• At the end of 2021, bank credit to the NFPS maintained a heterogeneous recovery and grew 4.9% YoY in nominal figures.
• Despite the still ongoing economic impact of the pandemic, the risks for the Mexican financial system remain bounded.
• In Mexico, total financing fell -3.5% YoY in real terms in the third quarter of 2021, while total financial savings fell -5.6%.
• A new equilibrium for the prices of risk assets seems increasingly distant in the face of the war in Ukraine.

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