Banco de Mexico’s SME support. Responses to COVID-19

Given the significant issues caused by COVID-19, Banco de Mexico decided to intervene in the national economy. Through economic policies, they would attempt to buffer the detrimental effects in the country’s economic and financial stability, as well as in the continuity of Mexican companies.

Published on April, 2020 Ana Karen Tello & Jorge Juarez
The decision to act arises from the scant of null response of the Secretaría de Hacienda (Mexican internal revenue ministry) to promote the economy and mitigate the effects resulting from the pandemic. The first substantial measure was to try to generate greater levels of certainty and stability for the affected companies by injecting more than 750 billion pesos, which represented 3.3% of the GNP, into the national economy.

Banco de Mexico would look to intervene in a straightforward manner in the economies of families and businesses through the commercial banks. The new debt and credit policy presented to the commercial banks expects to facilitate an easier and more efficient access to financing for the small enterprises that require such backing to guarantee their survival through the pandemic.

The government has done a poor job of protecting businesses, as well as pushing the economic recovery. The Banco de Mexico establishes that the financial backing is necessary given the significant contraction of the economy. The support of Banco de Mexico is like that given in other countries to avoid great declines in the country’s GNP.

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