Mexico | Banxico reiterates it will remain on hold

Summary

The policy statement does not reveal how strongly Board members are committed to an extended pause, leaving the upcoming minutes as the key source to assess the strength of that consensus.

Key points

• Key points:
• Banxico kept the policy rate unchanged at 6.50%, as widely expected, in a unanimous decision.
• The Board reiterated that “it will be appropriate to maintain the reference rate at its current level.”
• Weak domestic demand continues to support Banxico’s neutral stance, even as markets price in Fed tightening.
• Minor adjustments to the inflation outlook reinforced the view that recent supply shocks are fading.
• The services inflation stickiness continues to be the main obstacle to completing the disinflation process.

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