The Bank of Mexico (Banxico) would again cut the key rate of interest in its announcement next week, although forward the magnitude of the adjustments would decrease in the middle of a rebound in inflation and a weak economic growth.
According to a reuters survey released on Friday, 21 out of a total of 26 specialists expect Banxico, as the authority is known, the rate is lowered by 8%, from its current 8.5%, in what would be its fourth consecutive reduction of 50 basic points (PB).
Three participants expect the entity to fall in just 25 bp, while the remaining two believe it would keep it without changes, following the decision of the US Federal Reserve this week.
Banco de México has said that it analyzes the interbank rate again in 50 PB in its June 26 announcement, extending a monetary readjustment cycle that began in 2024 after it would take it to a maximum record of 11.25% as part of its efforts to tame inflation after the pandemic.
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However, the Consumer Price Index rebounded last month, exceeding the official 3% +/- target and sowing some doubts about the space that would have for a new reduction of this significant reduction.
Last week, subgovernor Jonathan Heath told Reuters that, in his opinion, the cuts of that caliber should be paused and evaluate the data.
A new 50 PB reduction would lead to the key rate at its lowest level in three years, which could give a respite to the weakened Mexican economy, although forward the majority perspective of the market is that the Central Bank should be more cautious in its following movements.
After the decision of next week, Banxico would opt for a 25 -bp cut in its next August announcement, according to 15 of the participants, possibly followed by a similar decline in September with what the rate would culminate the third quarter by 7.5%, according to the median of 21 projections.
Subsequently, a pause of the Settings cycle would come, so the leading rate would close the year by 7.5%, according to the median of 24 forecasts, and would end 2026 by 7%, according to the median of 16 estimates.
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The second largest economy in Latin America dodged a dreaded technical recession in the first quarter, but still faces serious risks in the midst of an internal activity that walks slowly and the uncertainty related to the tariff policies of the United States.
With Reuters information
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