Banxico expected to hold at its next meeting – BBH

Analysts at BBH have suggested the Mexican central bank would most likely keep its monetary stance unchanged at the September meeting.

Key Quotes

“The central bank has been on hold since the last intra-meeting emergency 50 bp hike to 3.75% in February”.

“CPI rose 2.80% y/y in mid-August, below the 3% target but the highest since mid-February. PPI and core measures have also been accelerating, suggesting a great pass-through from the weak peso”.

“Banco de Mexico next meets September 29. No action is likely then, but we expect a hawkish tone in the statement.  Growth remains sluggish, with GDP rising only 2.5% y/y in Q2”.