Mexico’s domestic debt: by user, short and long terms
Mexico‘s domestic debt totaled 11 trillion 403.3 billion pesos as of September 30, 2023, an interannual increase of 15.8%, according to data from the Ministry of Finance and Public Credit (SHCP).
Of this total, 10 trillion 785 billion pesos correspond to long-term and the remaining 618.3 billion to short-term.
Domestic debt refers to the money that the Mexican government has borrowed within the country. This debt can take various forms, such as government bonds and other financial instruments.
By user, the federal government owes 10 trillion 685.4 billion dollars; state-owned productive enterprises (Pemex and the Federal Electricity Commission), 368.9 billion, and development banks, 349 billion.
Domestic debt
On July 7, 2023, the SHCP carried out a debt swap in the local market for 132.9 million pesos, allowing Mexico to reduce its public debt and extend the average maturity of its debt portfolio from 8 to 8.1 years.
Then, on July 20, 2023, the SHCP made its first issuance of the sustainable Bono S for 23 billion pesos. The issue has a 12-year maturity, a fixed interest rate of 8 percent and a yield of 8.85 percent.
Finally, on October 25, 2023, the SHCP made its fifth issuance of BONDESG linked to the United Nations Sustainable Development Goals (SDGs) for 15 billion pesos.
Classification
Based on its origin, public debt is classified as domestic or foreign according to the residence of the holder of the debt (based on the location and not the nationality of the creditor).
On the one hand, domestic debt is financing obtained in the domestic market through the placement of government securities and direct loans with other institutions, whose main characteristics are that they are payable within the country and in Mexican pesos.
In turn, external debt refers to loans contracted by the public sector with foreign financial institutions and payable abroad in a currency other than Mexican pesos.
By period of contract. They are classified as short or long term. In the first case, these are loans obtained for a term of less than one year. In the second case, they are loans contracted for a term of one year or more.
