Mexico

Mexico's lower house moved to cut a profit sharing rate owed by state-owned oil giant Pemex to 30%, from its current 40%, as part of a sweeping 2024 tax bill passed by lawmakers early Friday morning, amid attempts to control Pemex's soaring debt, Reuters reported. Pemex's profit sharing rate (DUC), which is effectively a tax paid to the government, has been gradually lowered during President Andres Manuel Lopez Obrador's administration from a high of 65%. The bill, passed after a marathon overnight session, will be sent on to the senate for approval.

Mexico’s central bank is open to starting interest rate cuts in mid-2024, later than analysts expect, as a strong local economy complicates its inflation fight, a prominent board member said in an interview, Bloomberg News reported. Analysts are correct in penciling in the start of Banco de Mexico’s monetary easing no earlier than the first quarter of 2024, Jonathan Heath said in an interview on Friday.

Credito Real filed a prepackaged insolvency agreement in a Mexican federal court on Friday, people familiar with the matter said, in a bid to resolve the collapse of what had been the country’s biggest payroll lender, Bloomberg News reported. The company filed a so-called concurso mercantil with a plan that is backed by more than 50% of holders of its $1.9 billion of dollar bonds, said the people, requesting anonymity since they were not authorized to speak with media.

Mexico’s central bank kept interest rates unchanged for a fourth straight meeting and increased its inflation projections for next year, a sign that borrowing costs could stay higher for longer, Bloomberg News reported. Banxico, as the central bank is known, voted to hold the key rate at 11.25% on Thursday, matching the forecasts of all 23 economists surveyed by Bloomberg.

Mexico's headline inflation eased in the first half of September, official data showed on Friday, with the president calling on the central bank to focus on promoting economic growth given the improving inflation data, Reuters reported. Headline inflation in Latin America's second-largest economy hit 4.44% in the 12 months through early September, down from 4.64% at the end of August, data from statistics agency INEGI showed.

Mexico's economy grew in August by 3.4% compared with the same month a year earlier, and by 0.2% from the previous month, according to a preliminary estimate published by national statistics agency INEGI on Tuesday, Reuters reported. A breakdown of INEGI's preliminary data showed that secondary activities, which include manufacturing, increased in August by 4.8% on the year, while tertiary activities, which encompass the service sector, were up by 2.8%. Read more.

Credito Real will file as soon as next week a prepackaged insolvency agreement in a Mexican federal court in a bid to resolve the collapse of what had been the country’s biggest payroll lender, Bloomberg News reported. Creditors provided the company with documentation this week showing that holders of more than 50% of Credito Real’s $1.9 billion of dollar bonds had agreed to the deal, which allows for the filing to move forward.

Mexico’s annual inflation eased roughly in line with expectations in August, as the central bank says it’s not yet ready to discuss lowering record high borrowing costs given the “complex and uncertain” global outlook, Bloomberg News reported. Consumer prices rose 4.64% from the same month a year earlier, down from 4.79% in July, the national statistics institute reported Thursday.

Nubank, one of Latin America's biggest fintech companies, announced on Tuesday the launch of personal loans for the Mexican market, aiming to boost its financial services portfolio in the region's second-largest economy, Reuters reported. The new product will allow customers to obtain personal loans in less than five minutes through its platform, the digital bank's Mexican arm, known as Nu Mexico, said in a statement. The service will be available to employees on a test mode before hitting the market in the following months, it added.

Mexico’s central bank raised its growth projection for the country’s economy for this year and next, signaling that activity is surpassing policymakers’ expectations in large part due to strong trade with the U.S., Bloomberg News reported. Banxico, as the central bank is known, revised its estimate for 2023’s expansion to 3% from the prior reading of 2.3%, according to its quarterly report released Wednesday. For 2024, the bank now expects a 2.1% GDP expansion compared to the previous 1.6% estimate.