Despite the increases that the Bank of Mexico (Banxico) will make to the interest rate in the coming months, the bank does not expect a contraction in the demand for credit.
“We have not yet seen a decrease in credit demand because there is a lag between credit demand and interest rates. Credit demand is associated with an issue of economic growth expectations rather than interest rates,” he said. Daniel Becker, president of the Association of Banks of Mexico (ABM).
Analysts expect the interest rate to reach levels close to 11% this year as the Federal Reserve, the US central bank, has said it will keep rates high for a while. The Bank of Mexico itself has acknowledged that it expects high interest rates for a long time.
For the ABM, there will be less demand for credit, at least in 2022, because Mexico’s economic growth forecasts point to 2.4%; However, Mexicans will no longer be able to find loans with single-digit rates, as happened with mortgages since before the pandemic.
“We’re probably going to start seeing low double digits and that’s 10% or 10.5%, so it’s important to anchor inflation expectations,” Becker added.
The representative of the bankers stressed that they expect a good dynamism in consumption in the last months of the year, especially with the Good End, in November. Banks plan to launch offers such as months without interest, hand in hand with businesses. Becker’s optimism is also that the worst case scenario for banking occurred in the pandemic when the economy shut down.
“I would say that this was the worst scenario we have seen. Right now we see a complicated scenario, but not as complicated as the one we saw in the face of the pandemic, so we will probably see slight increases in non-performing loans, but very marginal,” he said.
The Council for Financial Stability of the Financial System, made up of Banxico, the Treasury and the National Insurance and Bonding Commission, said that the financial system shows resilience and a solid position with high levels of capitalization and liquidity. However, there are risks that could deteriorate the quality of the credit portfolio.