Example of Financial Concepts

DOLLAR WINDOW

It is the exchange rate applicable to any person, in retail.

DOLLAR SPOT

It is the wholesale exchange rate that occurs interbank.

DOLLAR FIX

The exchange rate issued by Banco de México applicable to settle obligations denominated in foreign currency payable in the Mexican Republic, determined on October 10, 2002, is 10.2195.

LIBOR RATE

It is the interest rate of London (London Inter Bank Offered Rate) in US dollars at 3 months, corresponding to the third Friday of the month immediately prior to that in which interest accrued, published in the International Bank of Mexico.

BALANCE INTERBANK INTEREST RATE (TIIE)

It is the 28-day equilibrium exchange rate of interest, published daily by the Bank of Mexico in the Official Gazette of the Federation.
In order to establish an interbank interest rate that better reflects the conditions of the market, Banco de México decided to publicize the Interbank Equilibrium Interest Rate (TIIE). For this purpose, through modifications of March 20, 1995 to Bank of Mexico Circular 2008/94, a procedure was established in accordance with to which the Bank itself, with quotes submitted by credit institutions, will determine said interbank interest rate of Balance.

The aforementioned procedure requires contributions from at least six institutions. If the aforementioned number of contributions is not met, Banco de México will determine the interest rate interbank equilibrium in question, taking into account the prevailing conditions in the money.
Considering that it will be useful for the general public and, in particular for people who carry out operations in the financial system, to know the interbank interest rate of equilibrium, it was determined that such rate will be published by the Bank of Mexico through the Official Gazette of the Federation, on the banking business day immediately following that on which it is determined.
The Bank of Mexico will publish the aforementioned TIIE together with the Average Interbank Interest Rate (TIIP) through publication in the Official Gazette of the Federation. Due to the fact that eventually this last rate will cease to be used in operations carried out by credit institutions, its publication will only be will be held until December 31, 2001, without prejudice to the fact that, if appropriate, Banco de México decides to continue with its publication after that date.
The Bank of Mexico will also inform in the aforementioned publication the name of the Institutions that participated in the determination of both interbank rates
Institutions interested in participating in the determination of the equilibrium interbank interest rate (s) of operations denominated in currency national (TIIE) and / or investment units (TIIE-UDIS), must declare it in writing to the National Operations Management of Banco de México, indicating the names of the persons authorized to receive information in this regard, which must bear the knowledge of the signatures granted by the Bank's Collections Office from Mexico.
The presentation of said writing will imply the acceptance of the institution in question to submit to each and every one of the provisions contained in this Annex.
The Bank of Mexico will publish in the Official Gazette of the Federation, the name of the participating institutions.
Banco de México will inform the participating institutions in writing of the days on which they may submit interest rate quotes in terms of the provisions of this Annex, as well as the terms and amounts in national currency and / or investment units for which they may present them. Likewise, Banco de México may indicate minimum and maximum limits to the aforementioned amounts, within which the quotes, in multiples of a base amount indicated by Banco de México itself, which will be called the amount base.
Banco de México will previously listen to the opinion of the participating institutions to determine the terms, amounts denominated in national currency and / or investment units and the differential referred to in the paragraphs previous.
In the event that the expiration date of the term for which the quotes are submitted corresponds to a non-business day bank, said term shall be adjusted to the nearest previous or subsequent bank business day, giving, in the event of equality, preference to the previous.
Quoted interest rates must be expressed as a percentage, closed to four decimal places.