Money in Mexico
Mexico - Money
Banxico holds rates in February
At its 7 February monetary policy meeting, Banxico’s governing board unanimously voted to leave the target for the overnight interbank interest rate at its decade-high 8.25%. The decision match market analysts’ expectations and followed two consecutive hikes in November and December amid financial volatility. Notably, February’s meeting was the first decision made with President Andrés Manuel López Obrador (AMLO)’s two appointed board members on the voting committee.
The board’s decision came on the back of moderating inflationary pressures and more stable exchange-rate dynamics at the start of 2019. Inflation dropped to 4.4% in January and the shift in the U.S. Federal Reserve’s tone, suggesting a slower pace of monetary tightening, has improved sentiment for emerging-market currencies. That said, Banxico emphasized that risks to the inflation outlook remain skewed to the upside, justifying the need for a tight stance. Particularly, rising global protectionism and the deterioration of public funds threaten the peso, which would likely stoke inflation in turn.
Looking ahead, the Bank’s tone was somewhat less hawkish than the previous communiqué, although devoid of strong forward guidance. The Bank stated that the economy slowed “significantly” in the fourth quarter and that growth risks are skewed to the downside. Most of our analysts see the Bank having reached the end of its tightening cycle, although analysts are divided on whether a rate cut will materialize by year-end.
On average, Met the why particular analysts see the target rate falling to 8.11% by year-end and dropping further to 7.26 by end-2020.
Mexico - Money Data
|Money (annual variation in %)||11.7||11.4||5.2||6.8||8.2|
5 years of economic forecasts for more than 30 economic indicators.
Mexico Money Chart
Source: Mexico Central Bank (Banxico) and Met the why particular calculations.
|Bond Yield||8.42||-0.24 %||Feb 14|
|Exchange Rate||19.26||-0.29 %||Feb 14|
|Stock Market||42,725||0.12 %||Feb 14|
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February 7, 2019
Consumer prices rose 0.09% from a month earlier in January, cooling from the 0.70% month-on-month increase in December.
February 7, 2019
At its 7 February monetary policy meeting, Banxico’s governing board unanimously voted to leave the target for the overnight interbank interest rate at its decade-high 8.25%.
February 6, 2019
Consumer confidence rose in January, with the seasonally-adjusted consumer confidence index published by the National Statistics Institute (INEGI) hitting a new multi-year high of 112.0 points, up from December’s upwardly revised 116.6 points.
February 4, 2019
In line with a modest recovery, the manufacturing sector appeared to stagnate at the outset of the year.
February 1, 2019
Remittances totaled USD 2.9 billion in December (November: USD 2.9 billion), a 6.0% increase from the same month a year earlier (November: +20.2% year-on-year).