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Published on Tuesday, May 14, 2019 | Updated on Wednesday, May 15, 2019

Banxico to keep rates steady at 8.25% and stay hawkish

After April´s surprising increase in inflation, a more dovish tone is now unlikely in the short term.

Key points

  • Key points:
  • The board will continue to highlight risks to its inflation target being met as headline inflation is above the upper limit of the target range and the core component remains sticky.
  • Even if the MXN remains relatively stable, the resumption of external risks from a potential US-China trade war should contribute to a cautious approach from Banxico.
  • With inflation falling back in coming months, and a deceleration in economic activity, policy easing should begin in 2H19.

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