Mexico has $13.6bn surplus to pay debt, boost oil fund


Mexico will use $13.6 billion from a central bank surplus to pay down debt and boost its rainy day fund, shoring up finances as it prepares a support plan for the beleaguered state oil company Petroleos Mexicanos.
The Finance Ministry will spend 167 billion pesos of the transfer to buy back debt and reduce bond issuance this year, while 70 billion pesos will go to boost the nation’s budget revenue stabilization fund. A plan to help Pemex will be released in coming days, the ministry said in a statement released after the central bank disclosed the surplus.
The government’s response comes after Pemex reported a record $32 billion-loss for 2015, which prompted Moody’s Investors Service to cut its credit rating two notches in March.
Finance Ministry officials have repeatedly said that they could give Pemex a capital injection once the company presents a credible business plan. By boosting its rainy day fund, Mexico could have the flexibility to add gasoline prices to its oil hedge program next year if the nation decides to remove set prices for fuel, the Finance Ministry’s chief economist, Luis Madrazo, said in an interview last week.

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