This capital injection represents a breath of fresh air for the Mexican economy 

The goal is to make it easier for financial intermediaries, commercial banks, to continue financing the economy

This capital injection represents a breath of fresh air for the Mexican economy 
This is the right time for several sectors to present ideas and solutions to mitigate the negative effects of COVID-19 - Photo: File Photo/EL UNIVERSAL
English 22/04/2020 09:44 Mexico City Editorial Actualizada 09:55
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After carefully analyzing the complex economic situation faced by the majority of the countries, caused by the effects of a paralyzed economy to halt the spread of COVID-19 and the historical collapse of oil prices, the Bank of Mexico decided to carry out a large capital injection that amounts to MXN $750,000 million, which means a breath of fresh air for small and medium companies that feared they would have to close soon. 

This capital injection, which equals 3% of the GDP registered in 2019, is aimed at reducing the negative impact the COVID-19 pandemic and oil prices will have on the market and to promote its improvement, as well as strengthening credit lines and provide more liquidity. 

The goal is to make it easier for financial intermediaries, commercial banks, to continue financing the economy, especially since their main beneficiaries are small and medium-sized companies, those who generate the majority of jobs in the country. 

The measures implemented by the Banxico show the importance of having autonomous institutions in democratic societies. During this crisis, society needs to come together without it being deemed as a gratuitous retreat from every order issued by the President. 

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This is the right time for several sectors to present ideas and solutions to mitigate the negative effects of COVID-19, even when they don’t follow the government’s priorities. In Mexico, and the world, there is not a single sector that won’t be affected by the pandemic. Now the challenge is to help everyone, not only a small group.

The new measure has been praised because it will allow the productive sectors to have enough liquidity to face the economic recession expected after the COVID-19 pandemic.

Now, as several experts have said, the Mexican government should implement another measure in support of the extraordinary effort launched by Banxico, such as granting tax facilities to companies who have been affected by the pandemic. Without a measure like this, it would be nearly impossible for the Mexican economy to overcome this crisis.

Recommended: Mexico unveils economic plan to tackle the economic crisis

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