Interest rates latest publications
Banxico cut the policy rate by 50 bp to 5.0% and surprisingly made significant dovish tweaks to the wording of the statement.
May 8, 2020
Peru | The Central Bank will keep a highly expansive policy stance for a prolonged period
The Board of the Central Bank decided to maintain the monetary policy rate at 0,25% in May. The accompanying statement included a “forward guidance” component, with the Bank committing to the current monetary policy stance as long as the negative effects of COVID-19 persist.
April 21, 2020
Banxico cuts its policy rate 50bp to 6.0% at an unscheduled meeting, as we anticipated
We expect Banxico to take the policy rate to 3.0% by year-end. In an unanimous vote, Banxico lowered the policy rate by 50bp to 6.00%.
The monetary policy rate has plenty of room to decline without affecting inflation or the MXN. The rate cut cycle should continue without a pause at least until the monetary policy stance is not restrictive.
Considering the absence of material changes over the intermeeting period, the Fed left target range of federal funds rate unchanged at 1.5-1.75%.
There is still plenty of room to cut rates; we expect the monetary policy stance to reach neutrality by the summer of next year.
A faster easing pace is warranted but Banxico is likely to remain overly cautious. No signs that Banxico is willing to speed up the long overdue easing cycle.