Background on the Secretary of Finance and Public Credit (SHCP)
The Secretaría de Hacienda y Crédito Público (SHCP), led by Edgar Amador Zamora, is responsible for managing Mexico’s public finances. Claudia Sheinbaum, the current Head of Government in Mexico City, requested a borrowing ceiling of 1.5 trillion pesos from the Congress for her first year in office, aiming to lower the fiscal deficit to 3.9% of GDP after reaching a record high of 5.7% in the previous year.
Debt Refinancing Details
The SHCP successfully refinanced 154 billion pesos of debt through the repurchase of short-term instruments such as Cetes, Bonos M, and Udibonos. This strategic move aims to optimize the public debt’s maturity profile.
- Refinanced Amounts:
- 46 billion pesos for maturities in 2025
- 60 billion pesos for maturities in 2026
- 48 billion pesos for maturities in 2027 and beyond
- New Instruments Issued:
- Emission of new instruments with maturities between 2027 and 2054
- Preference for fixed-rate, long-term emissions
Impact of the Refinancing
This refinancing has resulted in an 840 million pesos reduction in the financial cost for this year, which is a significant pressure on public spending. Furthermore, the average term of the refinanced debt has been extended by 5.18 years, contributing to a more sustainable and efficient debt structure.
SHCP’s Commitment to Responsible Debt Management
The SHCP emphasized its strategy of prudent debt management, strengthening investor confidence in Mexico’s macroeconomic solidity. This commitment includes adhering to a sustainable fiscal trajectory and strictly following the debt guidelines authorized by the Honorable Congress of the Union for the 2025 fiscal year.
External Debt and Future Implications
In addition to managing public debt, the Mexican government has also sought up to 15.5 billion US dollars in external debt from the Congress. This move underscores their dedication to maintaining financial stability and fostering economic growth.
