Mexican unidad de inversión
What is the Mexican unidad de inversión?
A unit of account that’s controlled by the Mexican government and used in the Mexican credit industry because of its stability.
Where have you heard about the Mexican unidad de inversión?
Investors in the Mexican mortgage market may come across the unidad de inversión (UDI). It has the currency code MXV (the Mexican peso code is MXN).
What you need to know about the Mexican unidad de inversión.
The unidad de inversión (literally a ‘unit of account’) was introduced in Mexico in 1995 as an inflation-coping mechanism for loans such as mortgages. It was intended to reduce lenders’ risk and uncertainty and boost access to the Mexican mortgage market.
As it’s linked to the exchange rate of the peso, the UDI adjusts with inflation, helping it to maintain its purchasing power and mitigate any losses from currency devaluation. Denominating mortgage loans in UDIs can lesson the likelihood of mortgage defaults.
Find out more about the Mexican unidad de inversión.
The unidad de inversión was introduced by the Mexican government in the wake of the Mexican peso crisis. Find out what triggered this crises in our definition.