Banxico resumes its easing cycle with a 25 bp rate cut, to 4.00%
Published on Thursday, February 11, 2021
Banxico resumes its easing cycle with a 25 bp rate cut, to 4.00%
A dovish Banxico leaves the door open for additional cuts even after acknowledging that headline inflation is set to temporarily rise in the near-term.
Key points
- Key points:
- Banxico resumes the easing cycle even after acknowledging that headline inflation is set to rise
- The Board seems to be less concerned about this expected jump in inflation
- If that implies a more forward-looking Board, it will constitute a very welcome development
- Given this, along with a dovish mood and an economy that is set to weaken further by the time of the next meeting, we think that the odds of a rate cut next meeting have increased
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