Mexico's Ministry of Finance and Public Credit published the Financial System Stability Council’s updated risk assessment following its 61st ordinary session, concluding that Mexico’s financial system remains solid and resilient despite a still-uncertain global backdrop. The update notes slower global growth momentum in the third quarter of 2025 and expects further deceleration in 2025 and 2026, alongside mixed inflation trends and a cautious stance from major central banks, including a US Federal Reserve cut in September to a 4.0 to 4.25 percent target range for the federal funds rate. Global financial conditions eased significantly during the quarter as volatility fell and risk appetite improved, although risks remain from trade policy, geopolitics and shifts in global monetary conditions. In Mexico, local markets were described as orderly and low-volatility, with the peso appreciating by slightly more than 4 percent against the US dollar since the previous Council session, government yields declining across maturities and main equity indices rising around 11 percent, while domestic activity appeared sluggish and downside risks persist. The Council reiterated that commercial banks’ capital and liquidity comfortably exceed minimum regulatory requirements, and it presented the macroeconomic scenarios to be used in the annual capital adequacy assessment, with results to be published in the Council’s annual report. It also reported no material funding concentrations between individual banks and non-bank financial intermediaries, while noting that foreign holdings of peso-denominated assets have risen in 2025 but remain below end-2023 levels and are viewed as a contained risk.

Original source View in tracker