Mexico’s government announced budget cuts of nearly $7.3 billion Wednesday, with most of the savings at state-oil firm Pemex due to falling oil prices and global worries over China’s economy.

In a coordinated move, the central bank raised its key interest rate by 50 basis points to 3.75 percent to counter the peso’s depreciation against the dollar.

The 2016 public spending cut amounts to 0.7 percent of gross domestic product, the finance ministry said in a statement.

It said the decision stems from the volatility of international financial markets, which have been hit by falling oil prices, the US Federal Reserve’s interest rate hike and the risks of a global economic slowdown, “mainly in China.”

The government will immediately slash $1.7 billion from public spending while the head of Pemex will propose to the company’s board next week to cut $5.5 billion from its budget.

Pemex already had to reduce spending by 11.5 percent last year. The company posted losses of $10.2 billion in the third quarter of 2015.

Finance Minister Luis Videgaray told a news conference that the government is examining whether to inject Pemex with fresh capital, but no date or amount have been set.