Banxico reported that with this transfer, both the central bank’s liabilities and assets are increased by the same amount.
“On the one hand, the holding of (or investment in) SDRs is increased by SDR 8,542.4 million, which is an integral part of the international asset reserve of the Bank of Mexico,” the central bank explained.
The SDR is an international reserve asset created by the IMF in 1969 to complement other reserve assets of member countries. Having SDR allows members of that body to reduce their dependence on other assets to build international reserves.
The resources received this Monday will be reflected in the weekly account statement that will be released on August 31, 2021.
The SDRs received by the Bank of Mexico will form part of the international reserves and the use of this money is to contribute to the stability of the purchasing power of the national currency by compensating for imbalances between the income and expenses of the country’s foreign currency.
“One of the operations allowed with the international asset reserve is that the Federal Government, through exchange operations with Banco de México, can count on foreign currency to meet its foreign currency obligations,” Banxico said.
The Federal Treasury can buy or sell foreign currency with Banco de México with resources from the Federal Government itself at market prices.