Banxico has the space to further relax monetary policy

Summary

Since the arrival of the coronavirus to Mexico, Banxico has reduced the monetary policy rate by 2 percentage points, bringing it from 7% to the current level of 5%. The central bank can still lower it by at least another two percentage points and bring it down to 3% without posing a risk for inflation.

Key points

• Key points:
• The U.S. Federal Reserve has lowered interest rates to zero and has also made the largest injections of liquidity in history
• Banxico has a lot of room for maneuver. Should not miss it

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