Background on CETES and Banco de México
Certificados de la Tesorería (CETES) are short-term government bonds in Mexico, highly sensitive to changes in monetary policy. Banco de México (Banxico), the country’s central bank, issues these bonds to manage liquidity and finance public debt. Banxico’s recent policy decisions have had a significant impact on CETES rates.
Recent Banxico Meeting and Policy Decisions
Following the latest monetary policy meeting, Banxico decided to cut the reference interest rate by another half percentage point. This decision has led to mixed results in the recent government bond auction.
CETES Auction Results
- 28-Day CETES: Banxico placed 9,000 million pesos at a rate of 7.70%, down 0.30 percentage points from the previous issue. The demand was 2.74 times the amount placed, lower than the previous 3.62 times.
- 91-Day CETES: The bank issued 10,000 million pesos at a rate of 8.08%, an increase of 0.15 percentage points from the previous issue. The demand was 2.22 times the amount placed, lower than the previous 3.40 times.
- 174-Day CETES: The government issued 8,000 million pesos at a rate of 8.18%, an increase of 0.09 percentage points from the previous offer. The demand was 2.06 times the amount placed, lower than the previous 2.84 times.
- 679-Day CETES: The government issued 17,000 million pesos at a rate of 8.60%, unchanged from the previous auction. The demand was 2.43 times the amount placed.
- 30-Year MBono: Banxico issued 10,000 million pesos at a rate of 9.77%, down 0.24 percentage points from the previous issue. The demand was 2.31 times the amount placed.
- UDIBONOS: The government issued 3-year UDIbonos with a face value of August 2029 at a rate of 4.66%, an increase of 0.09 percentage points from the previous issue. The demand was 2.41 times the amount placed.
- Bondes F: The government issued 329-day Bondes F with an over-subscription rate of 0.07% (previously 0.06%). The demand was 1.83 times the amount placed.
Impact on CETES Rates
The 28-day CETES rate has dropped by 30 basis points compared to the previous government bond auction, reflecting Banxico’s efforts to stimulate economic growth by lowering borrowing costs for the government and businesses.
Key Questions and Answers
- What are CETES? CETES are short-term government bonds issued by Banco de México to manage liquidity and finance public debt.
- Why are CETES rates important? Changes in CETES rates indicate shifts in monetary policy and can influence borrowing costs for the government, businesses, and consumers.
- What was the outcome of Banxico’s recent policy meeting? Banxico cut the reference interest rate by another half percentage point, leading to mixed results in the recent government bond auction.
- How did CETES rates change following the policy meeting? The 28-day CETES rate dropped by 30 basis points, while other CETES rates saw varying changes depending on their maturity.
