Mexican Treasury Certificates Offer Attractive Returns Compared to Inflation
In the most recent auction held by Mexico’s central bank (Banxico), 28-day Treasury Certificates—known as Cetes—saw a slight rebound in their yield, reaching 7.5%. This adjustment puts an end to the declining trend seen in previous weeks and reinforces Cetes’ position as a relevant investment alternative, especially given the current inflation rate in the country.
Cetes are debt instruments issued by the federal government and are available for various terms: 28, 91, 182, 364, and up to 707 days. The face value of each Cete is 10 pesos, but investors buy them at a lower price, benefiting from the difference when they receive the full value at maturity. This mechanism allows them to obtain clear and often higher returns than those offered by other short-term savings options, even in low-volatility environments.
The results of the latest auction showed mixed yields across the different instruments: while 28-day Cetes rose by 0.02 percentage points, the 91-day Cetes dropped to 7.8%. Meanwhile, the 182- and 364-day terms recorded yields of 7.94% and 8.04%, respectively. These shifts come amid market expectations of a possible cut in Banxico’s benchmark interest rate, which currently stands at 8%. Financial analysts anticipate that, in its upcoming monetary policy meeting, the central bank might lower the rate by 25 basis points—a move that could impact future Cete yields.
Despite the downward trend these instruments have shown in recent months—following Banxico’s rate cuts that began in the second quarter of 2024—Cete yields remain significantly above the annual inflation rate, which, according to the National Institute of Statistics and Geography (Inegi), stands at 3.55%. This means that any investment in Cetes currently doubles the rate of price growth, making them an effective tool for preserving purchasing power and even generating a positive real return.
The strength of Cetes as an investment choice for small savers is also tied to their low risk and high liquidity compared to other financial instruments. In a global economic environment characterized by uncertainty and potential adjustments in monetary policy by the United States and other economies, Mexican investors continue to see Cetes as a safe haven for their capital.
Looking ahead, Cete yields will largely be shaped by Banxico’s decisions on interest rates and the trajectory of national inflation. While returns could moderate if the benchmark rate drops further, Cetes remain attractive thanks to macroeconomic stability and the fiscal discipline shown by the federal government in recent years.
In summary, Cetes continue to be a relevant, simple, safe, and profitable instrument for the average Mexican investor—especially as long as inflation stays in check and the monetary environment remains favorable. Nevertheless, savers should keep an eye on interest rate changes and signals from the global economy to make informed financial decisions.
Based on recent market trends, Cetes remain a solid option for those seeking to protect their money from inflation without taking on excessive risk. However, their future profitability will largely depend on the interplay between inflation, benchmark rates, and economic stability over the medium term.
