Heteronomics Archive

November 14, 2024

Mexico: 25bp Rate Cut To 10.25% (Consensus 10.25%) in Nov-24

Banco de México reduced its overnight interest rate by 25 basis points to 10.25%, matching market expectations and signalling a shift from a restrictive stance amid stabilising core inflation trends.
Future rate decisions will be data-dependent, considering global disinflation patterns, geopolitical risks, domestic currency volatility, and potential economic slowdown in 2025.
The inflation trajectory, with projections for convergence to target by Q4 2025, underpins a cautious policy outlook with risks biased to the upside due to persistent core pressures and potential foreign exchange impacts.

August 08, 2024

Banco de México lowered the overnight interbank interest rate by 25 basis points to 10.75%, surprising consensus expectations for no change, demonstrating a responsive approach to changing economic conditions.
While headline inflation increased to 5.57% due to non-core components, core inflation continued its downward trend, prompting the central bank to reassess the level of monetary restriction necessary.
The central bank foresees the potential for further rate adjustments as inflationary pressures and economic conditions evolve, focusing on achieving the 3% inflation target by the end of 2025 while monitoring upside risks such as persistent core inflation and geopolitical tensions.

June 27, 2024

Banco de México maintained the overnight interbank interest rate at 11.00%, reflecting a cautious approach amid persistent inflationary pressures and economic uncertainties.
Headline inflation increased slightly to 4.78% by mid-June 2024, while core inflation decreased to 4.17%; inflation expectations for the end of 2024 were revised upwards for headline inflation.
The central bank emphasized a prudent monetary policy stance, with potential future adjustments based on the evolving inflationary environment and economic conditions, focusing on achieving the 3% inflation target by late 2025.

May 09, 2024

Banco de México held the overnight interbank interest rate at 11.00%, in line with economic consensus, reflecting continued caution amid mixed inflation signals and subdued economic growth.
Despite a decrease in core inflation, headline inflation rose slightly, leading to an upward revision of future inflation forecasts and extending the expected timeline for achieving the 3% inflation target to the end of 2025.
The central bank recognizes the prevailing economic and geopolitical risks, maintaining a restrictive policy stance while preparing for potential adjustments based on forthcoming economic data and inflation trends.