By Juan Montes / Wall Street Journal
Mexico’s government said it will use most of the $13.6 billion in excess funds from the central bank to reduce public debt, in a moment of fragility for the public finances after the sharp drop in oil prices.
The Finance Ministry said it would use $9.5 billion, or 70 percent of the total, to repurchase existing federal government debt and lower the amount of debt to be issued this year. The rest will be transferred to a budget stabilization fund, and a small part used for Mexico’s contributions to multilateral organizations such as the World Bank.
The move is expected to support confidence in public finances after Moody’s Investors Service changed the outlook for Mexico’s sovereign debt rating to negative from stable, citing low oil prices and weak economic growth.