fxstreet.com 05 Feb, 2021 17:15 am

Banxico to deliver final rate cut next week – Capital Economics

Banxico to deliver final rate cut next week – Capital Economics
Next week, the central bank of Mexico (Banxico) will have its board meeting. Analysts at Capital Economics expect a final rate cut of 25 basis points,

Analysts at Capital Economics expect a final rate cut of 25 basis points, ending the easing cycle.Key Quotes: “We think that Mexico’s central bank (Banxico) will deliver one final 25bp cut to end the easing cycle.Both decisions were 3-2 splits (hold versus cut), and both accompanying statements mentioned a ‘pause’ in the easing cycle.They don’t see scope for additional easing beyond next week as a rise in energy inflation is likely to push the headline CPI back above the top of the target range during the second quarter.

Inflation has fallen back within Banxico’s target range." “Banxico’s Board has left the policy rate unchanged at its last two meetings, but it’s clear that a cut has remained a possibility.

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