Regulatory Alerts2020-05-19 | Circular 17/2020Added
Circular 17/2020 — Rules Applicable to Government Securities Repo Operations with the Bank of Mexico to Cover Liquidity Needs
The Bank of Mexico establishes rules allowing multiple and development banking institutions to conduct government securities repo operations with the central bank to obtain national currency liquidity without selling assets under market stress conditions. The regulations define eligible government securities (CETES, BONDES, BPAS, BREMS), set a standard three-month term capped at 93 days, and mandate a premium calculation based on 102% of the one-day interbank target rate. Institutions must provide collateral valued at or above the loan price plus estimated premium, with daily margin calls requiring additional securities if the collateral value drops below the required threshold.
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