Banxico Sends MX$18 Billion Surplus to SHCP for Debt, Budget Use

Mexico’s Central Bank (Banxico) will transfer an operating surplus of MX$17.9 billion (US$917 million) to the Ministry of Finance and Public Credit (SHCP) this year, marking the first such transfer since 2016, according to its audited 2024 financial statements.

The transfer, mandated by law, must be completed by the end of April. Banxico reported a net result for 2024 of MX$836.77 billion, with MX$737.54 billion used to offset accumulated losses from previous years.

As a non-profit institution, Banxico is required to deliver any remaining surplus to the federal government after reserving funds to maintain its operational stability. The central bank emphasized that the surplus calculation adhered strictly to the Banxico Law and supported its constitutional mandate to ensure low and stable inflation.

To prevent inflationary pressures from the government’s use of these funds, Banxico stated that any monetary effects will be neutralized through open market operations.

This year’s transfer falls significantly below previous analyst expectations. Banamex had projected a surplus of up to MX$110 billion, citing peso depreciation against the dollar in late 2023, while Citi estimated as much as MX$175 billion, or 0.5% of GDP.

In its 30 years of autonomy, Banxico has transferred a surplus to the federal government only 10 times, primarily during periods of significant currency depreciation. These occurred in 1995, 1996, 1998, 2002, 2003, 2008, 2014, 2015, 2016, and now 2025.

Under the Federal Budget and Fiscal Responsibility Law, at least 70% of the surplus must be used to reduce public debt or financing needs for the budget deficit. This means approximately MX$12.6 billion will be directed toward debt-related obligations.

The remaining funds will be allocated to the Budgetary Income Stabilization Fund (FEIP) or used to bolster financial assets that improve the government’s fiscal position. By the end of 2024, the FEIP held a balance of MX$97.21 billion, marking a 238% increase from December 2023 but still 53% below its pre-pandemic level in 2019.

The surplus comes as President Claudia Sheinbaum’s incoming administration faces mounting pressure to reduce the fiscal deficit. The 2025 Economic Package aims to lower Public Sector Borrowing Requirements from 5.7% of GDP in 2024 to 3.9% in 2025 through spending cuts and increased tax revenues.