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Our forecast still leans towards a further rate hike in September (reaching a terminal rate of 4% for the deposit rate); however, recent data weaknesses and ECB communications before and during the meeting have increased the likelihood of a potential pause and the possibility of no further hikes.

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

With this decision, Banxico ended the fastest ever rate-hiking cycle, acknowledged that a "disinflationary phase is underway" but stated that it will keep the policy rate “at its current level for an extended period”

The next move is not around the corner but will be a cut. Banxico might start to cut rates in 4Q. We think it should .

Overall, today’s meeting makes it clear that following the widely expected next rate hike in June (to 3.50%/4.00%, depo/refi rate), more rate increases are quite likely, although they will also depend on the nature of incoming activity data and…

Banxico raised the policy rate by 25 bp to 11.25%, acknowledged that inflation was slowing, revised down its short-term headline inflation forecasts, took a less hawkish tone and left the door wide open for a pause at the next meeting in May

Overall, today’s meeting does not point to any particular bias to our view that the ECB will hike rates by 50bp in March and 25bp more in May, to reach 3.75%, as a terminal rate. Market reaction was dovish, in line with yesterday's movements on US rates as central banks´ - Fed, BoE and ECB- are seen to be near the peak

Banxico will most likely stick to following in the footsteps of Fed’s upcoming hikes .

There’s a lot of tightening still in the pipeline: Banxico will likely match the (now larger) Fed’s expected rate hikes .

In its June meeting, Banco de la República increased the monetary policy rate by 150 basis points to 7.5%. The vote was unanimous.

In the United States, after more than a decade in which inflation was consistently below the Federal Reserve's (FED) target, it has risen to levels not seen in 40 years.

Housing credit from commercial banks registered better granting conditions and a recomposition in their destination, while the automotive segment showed a drop in real terms, despite offering better conditions on both terms and interest rates. Business credit fell 3.1% YoY during August.