Central Banks Must Act in Crisis; Banxico Raises IIR

The International Monetary Fund (IMF) urged central banks to provide proper monetary policies to help address the global crisis. Mexico’s Central Bank (Banxico) met this week to raise interbank interest rates. 

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Central Banks Must Help Alleviate Current Crisis 

IMF warned that the global economic outlook has worsened for 2023, but Latin America’s favorable commodity conditions, external financing conditions and relevance have increased the region’s growth forecasts. The IMF also warned that authorities must “prevent” the accumulation of financial vulnerabilities. 

“Financial vulnerabilities are elevated in the sovereign and non-bank financial institution sectors, while market liquidity has deteriorated in some major asset classes,” said the IMF.

Cryptocurrencies Still Raise Clarity and Ease-of Use Questions 

Crypto has been slow to penetrate Latin America due to the variety of regulatory standpoints, said Fernando Terrés, Co-Founder and CEO, DolarApp. The company will use its US$5 million KASZEK-led seed round to create more compelling products, launch services in additional markets and deliver its product in new ways, added Terrés. 

“The role of crypto depends on how good it becomes at solving problems. One problem that crypto solves well is remittances: through crypto, money transfers can be done in the blink of an eye and for a fraction of the cost than regular remittances. The rest depends on two things. The first is adding more capabilities for crypto to do more than traditional finances and to do them efficiently. The second is the go-to-market,” said Terrés.

Aeroméxico Will Quit Mexican Stock Exchange 

Aeroméxico canceled its subscription to the National Securities Registry and will delist from the Mexican Stock Exchange (BMV) as part of its obligations under the US Chapter 11 Bankruptcy procedure. 

Banxico’s Board of Governors Unanimously Increases IIR

Banxico’s board agreed to increase the target for the overnight Interbank Interest Rate by 75 basis points to 9.25 percent, as inflation continues to pressure the economy with a historical growth. The board also partly linked the economic slowdown in 3Q22 to Russia’s invasion of Ukraine. 

Raising Investment Rounds Under Uncertainty

Paulina Aguilar, Co-Founder and CRO, Mundi, explained that the right strategy and value creation are the most vital points to attract investors. 

“If you want to start investing, do it; however, we recommend you investigate the market and its movements in recent months. Although the intention of investing is the increase of assets, it must be remembered that investing is a bet on the future and anything can happen. Invest, innovate and grow; anytime will be a good time to do it,” said Aguilar.