MEXICO CITY (MEXICO) – The finance ministry of Mexico is planning to extend relaxed banking credit regulations in a bid to help the battered economy recover. This comes in the wake of the government presenting an austere budget for 2021 with little room for manoeuvres.
According to Deputy Finance Minister Gabriel Yorio, talks are going on with banks, including the central bank, about the extensions until next year so that loss of collateral and default can be avoided.
Such measures were introduced earlier this year to cushion the impact of the virus crisis, which is similar to the 1995 “Tequila crisis,” when thousands lost their homes and savings.
The minister said the government was hopeful of an extension being announced in a couple of weeks.
The finance ministry and the central bank earlier this year reached a deal to loosen credit quality curbs for financial institutions. Banks, in return, would offer borrowers repayment options to avoid defaults.
“What we have to do, maybe, is be selective with the sectors,” Yorio said.
The minister said that it could take up to three years for the country’s economy to normalise.
“If the economic opening is delayed, it might take us even more time,” he said.
