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November 15, 2024
A majority will remain determined to continue the easing cycle over the coming months, but we now expect Banxico to lower the policy rate to 8.00% by the end of next year (up from our previous 7.50% forecast).
November 12, 2024
Banxico is likely set to cut the policy rate by 25 bps this week in a backdrop of easing core services inflation, which is starting to turn a corner amid a challenging context for economic activity.
November 1, 2024
Remittances show high volatility in the first 9 months of 2024: 5 months with growth and 4 months with falls. Possibly, the tense electoral environment in the US has an impact on the flow of new migrants and the migrant population residing in that country.
October 2, 2024
Large fluctuations in the USD/MXN exchange rate impact Mexican migrants' decisions on the amount to remit. In August, the peso depreciated 5.4%, which boosted a 9.3% growth in remittances to Mexico in dollars and an increase converted into pesos of 17.0% in real terms.
September 27, 2024
In a backdrop of an “improving” inflation outlook and worsening growth prospects, a majority of members seem to think the central bank has ample wiggle room to cut rates. The forward guidance now strongly suggests that Banxico is set to embark in a streak of consecutive rate cuts ahead.
September 24, 2024
In view of the lags of monetary policy, we think that Banxico is already late in adjusting the excessively high real ex-ante rate, and thus, the monetary policy stance is set to continue to weigh on the economy in the coming quarters.
September 2, 2024
Remittances have been volatile over the past five months. Increases have been reported in two of them (April and June, even months) and declines in three months (March, May and July, odd months). In August, the peso depreciated 5.4%, so the next remittance report is expected to show growth.
August 6, 2024
Our base case is a split 3-2 vote in favor of a 25bp rate cut to 10.75% with a majority of members acknowledging a weakening economy and increased confidence about the inflation outlook, but the sudden peso depreciation following the weekend’s global volatility bout represents a risk to our call.
August 1, 2024
The depreciation of the Mexican peso (MXN) against the dollar (USD) of 7.6% in June may partly explain this observed increase in remittances. Mexicans abroad take advantage of this temporary rise to send more dollars, which translates into more pesos for their relatives.
July 1, 2024
In the last 5 years, the effect of “Mother's Day” drove the arrival of 6.5% more remittances in the month of May, compared to the trend marked by the adjacent months of April and June. In 2024, this translates into an amount close to 364 million more dollars in remittances.
June 28, 2024
Board members voted 4-1 to hold rates steady at 11.00%. The fact that the decision wasn’t unanimous came as a bit of surprise considering the recent peso weakening and that Banxico was set to revise up its short-term headline inflation forecasts.
June 27, 2024
Banxico will most likely suggest it will proceed with caution, at least until more information is available about the judicial reform and the type of fiscal adjustment that will be implemented next year to fulfill the federal government’s commitment to reduce the public deficit by 2.9 points of GDP next year.
