- Analytics
- News and Tools
- Market News
- MXN: Growth concerns outweigh inflation – Commerzbank
MXN: Growth concerns outweigh inflation – Commerzbank
It was the expected close decision. By a vote of 3-2, the Mexican central bank (Banxico) yesterday decided to cut interest rates by 25 basis points to 10.75%, Commerzbank’s FX strategist Michael Pfister notes.
Peso set to remain under pressure
“At the same time, the statement clearly indicated that rate cuts could continue in the coming months. This was despite an upward revision to the headline inflation forecast for the end of the year. Banxico seems to be focusing more on the core rate, which is less volatile and, in the eyes of policymakers, has more of a downward trend.”
“In my view, the rate cut sends a very clear signal: inflation no longer seems to be Banxico's main focus, but growth concerns (also underpinned by the second quarter figures, which were again weak last week) prevail. This is certainly justified, given that the real interest rate remains clearly positive even after the decision.”
“However, it should be noted that the core rate has recently given little indication that the inflation target will be reached in the next year and a half. And US recession concerns are unlikely to go away. Given these risks and the fact that Banxico has acted despite the MXN depreciation, we feel confirmed in our view that the Peso will remain under pressure.”
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.
Bank transfers
