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Published on Thursday, September 30, 2021 | Updated on Friday, October 1, 2021

Sizable upward revision to core inflation forecasts points to more tightening

Summary

The tightening cycle will likely continue, but we stick with our more dovish view than priced by markets for 2022 .

Key points

  • Key points:
  • Banxico hiked the policy rate by 25bp to 4.75%; the wording of the Statement was broadly unchanged
  • However, two major changes point to more tightening
  • We stick with our base scenario of one more 25bp rate hike in November but our bias now shifts to an additional one to 5.25% in December

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Documents and files

Report (PDF)

BanxicoWatch_30Sep21.pdf

English - September 30, 2021

Authors

JA
Javier Amador BBVA Research - Principal Economist
CS
Carlos Serrano BBVA Research - Chief Economist
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