Mexico | Banxico held the policy rate steady at 11.25% for the second meeting in a row

Summary

Banxico kept a hawkish tone and reiterated that it is set to keep "rates on hold for a while extended time".

Key points

• Key points:
• Banxico acknowledged that the “disinflationary phase” remains underway...
• ... and revised its 2023 headline inflation expected path downwards bringing it closer to our forecasts.
• We expect Banxico to start a rate cut cycle in 4Q23 to avoid an additional increase in the already very high ex-ante real rate.

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