Banxico expected to cut rates 25bps – BBH
Mexico’s central bank is widely expected to lower the policy rate by 25bps to 7.50% as inflation remains below the Q3 projection, while the country’s solid fundamentals, including positive real rates and balanced current accounts, continue to support the MXN, BBH FX analysts report.
Fundamentals remain supportive for MXN
"Mexico’s central bank (Banxico) is widely expected to trim the policy rate 25bps to 7.50% (8:00pm London, 3:00pm New York). Mexico headline inflation (3.57% in August and 3.51% in July) is tracking below Banxico’s Q3 projection of 3.8% and argues for additional easing. At the last August 7 meeting, Banxico voted 4-1 to cut the policy rate 25bps to 7.75%."
"The dissenter, Jonathan Heath, favored keeping rates on hold for a second consecutive meeting. The bigger picture remains positive for MXN. Mexico has positive real interest rates, a current account that is roughly in balance and solid net FDI flows."
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FXStreet Insights Team
FXStreet
The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.
