Banxico ends hiking cycle but will keep rates on hold for a while

Summary

With this decision, Banxico ended the fastest ever rate-hiking cycle, acknowledged that a "disinflationary phase is underway" but stated that it will keep the policy rate “at its current level for an extended period”

Key points

• Key points:
• Banxico revised down its 2023 headline inflation path to bring it closer to our forecasts
• Monetary policy will remain very tight during 2023-24
• With inflation easing towards 4.5% by year end, we think Banxico should start to cut rates in 4Q

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