Banxico cuts its policy rate for the 5th meeting in a row

Summary

The monetary policy rate has plenty of room to decline without affecting inflation or the MXN.

Key points

• Key points:
• In an unanimous vote Banxico lowered the rate to 7.00%
• The wording of the statement remains cautious and somewhat hawkish
• In our view, at least a neutral stance (nominal rates of 6.0% or lower) is warranted but Banxico’s hawkishness tilts the risks to less cuts not more

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