In their monetary policy decision of June 26, the members of the Governing Board stressed that it will be “the inflationary environment” that will allow them to discuss adjustments to the reference rate.
This was read by analysts as the bank already planning to adjust the rate next August also due to a stabilization in the disinflationary process.
Inflation forecasts remained stable as of the fourth quarter of this year and it is expected that it will be in the fourth quarter of 2025 when inflation achieves the 3% target.
Although the Mexican peso has faced a period of high volatility since the elections in Mexico, it is expected that it will not affect inflation.
“The recent strength of the exchange rate can be explained to a large extent by a larger rate differential, wider with respect to the historical level that has been observed and that has made the Mexican peso attractive,” said Daniel Castañón, economist at GBM.
With the US elections approaching, analysts expect Banxico to remain cautious in its exchange rate behavior in the face of a possible depreciation of the peso.
In addition, the rate differential with the United States – an important benchmark for Banxico – remains high. “The rate differential would continue to be well above the historical median.
GBM highlighted that the rate differential between Banxico and the United States Federal Reserve is 550 basis points, which has provided support to the exchange rate.
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