Next week the Bank of Mexico will have its monetary policy meeting. According to analysts at Wells Fargo, Banxico will follow the Federal Reserve with another 75 basis points rate hike, brining the key rate to 10%.
“With the Federal Reserve maintaining its hawkish stance on monetary policy and lifting interest rates 75 bps, we believe the Central Bank of Mexico will match that pace of tightening next week. Historically, Banxico has followed Fed interest rate decisions, and we do not think a decoupling will materialize next week. For what it’s worth, Mexican policymakers have commented that a decoupling could be warranted if conditions change. However, with Mexico inflation still running above target and the economy relatively resilient, conditions have yet to change, and a 75 bps hike is likely to be delivered by Banxico members next week.”
“A 75 bps rate hike would leave Banxico as one of the last Latin American central banks that have not pivoted to a less aggressive stance on monetary policy. Peer central banks have started communicating a slowdown in their respective tightening cycles, although Mexico policymakers have yet to take their feet off the brakes. This hawkish posture has supported the Mexican peso over the course of this year and has resulted in the peso being one of the few currencies to strengthen against the dollar in 2022.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.