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Published on Thursday, July 15, 2021

Mexico | Banxico: contempt for communication

On June 24, the Board of Governors of Banco de México decided, with three votes in favor and two against, to increase the monetary policy rate by 25 basis points

Key points

  • Key points:
  • Two decades ago, the world's leading central banks and most academic experts on the subject came to the conclusion that a more transparent monetary policy is also a more effective monetary policy
  • Board members who voted to increase the monetary policy rate showed a disdain for communication and transparency
  • If the central bank achieves, through its communication strategy, a certain degree of predictability in the markets, it will be able to more easily move interest rates in the desired direction, thus strengthening the monetary policy transmission channel and reducing volatility in the markets. financial markets

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