MuniGuate
Walmart
Herbalife
Grupo Hotelero Islazul
Cubasol
Los Portales
Realidad Turística
AVA Resorts
INOR
Nestle
CUN-HAV Enjoy Travel Group
blackanddecker
Cervecería Centroamericana S.A.
Barceló Solymar
Intecap
Instituto Hondureño de Turismo
INTERFER
Servicios Médicos Cubanos
MITM Events
Agexport
Centro Nacional de Cirugía de Mínimo Acceso de Cuba
MAD-HAV Enjoy Travel Group

Mexico’s Central Bank Opens Door to Larger Rate Cuts, Citing Progress on Inflation

Date:

Share:

INOR
Nestle
MITM Events
Herbalife
Realidad Turística
Cervecería Centroamericana S.A.
Intecap
Servicios Médicos Cubanos
Los Portales
INTERFER
Instituto Hondureño de Turismo
blackanddecker
Centro Nacional de Cirugía de Mínimo Acceso de Cuba
Grupo Hotelero Islazul
AVA Resorts

Estimated reading time: 3 minutes

The Bank of Mexico could increase the size of cuts to its benchmark interest rate in future meetings as inflation eases in Latin America’s second-largest economy, minutes from the central bank’s December monetary policy meeting showed on Thursday.

Banxico, as the Mexican central bank is known, lowered its benchmark interest rate by 25 basis points to 10.00% in a unanimous decision by its governing board last month.

“In view of the progress on disinflation, larger downward adjustments could be considered in some meetings, albeit maintaining a restrictive stance,” the minutes said.

A breakdown of the board members’ positions showed three of the five members supporting the discussion of larger rate cuts.

Banxico began a rate-cutting cycle last March amid easing inflation, ultimately delivering five 25-basis-point cuts to bring the benchmark rate down from the record 11.25% that it reached in 2023.

The minutes “show that there is a consensus to continue lowering the rate at the next meeting, although there are differences in the pace at which this could occur,” Actinver Research said in a note.

DISINFLATION PROGRESS

One of Banxico’s board members pointed to “the undeniable progress in disinflation” to support their view that “it is necessary to increase the magnitude of rate cuts in some of the upcoming monetary policy decisions.”

Another member highlighted “the importance of communicating that adjustments of larger magnitude could be implemented at the next policy meetings.”

Banxico has taken a more hawkish approach to monetary easing than that of some of its Latin American counterparts, like Brazil and Uruguay, which have begun raising rates again after bringing them down quickly only to see inflation rebound.

Two board members remained cautious, warning against premature monetary easing, with one “committed hawk” alerting against “accelerating the pace of easing or signaling that it could be done at future meetings,” said Alberto Ramos, chief Latin America economist at Goldman Sachs.

Still, a majority of directors acknowledged that the inflation outlook continued to improve, even though the board revised its year-end inflation forecasts for 2025 higher.

“Most members stated that the revision in forecasts does not suggest an interruption in the disinflation process, but rather a more gradual reduction in headline and core inflation,” the minutes said.

Data published earlier on Thursday showed Mexico’s annual headline inflation rate fell more than expected in December, reaching 4.21%.

Banxico targets inflation at 3%, plus or minus one percentage point.

Board member Jonathan Heath later said in a social media post on Thursday that the December inflation reading was “good news,” noting that it was the first month in which inflation fell below the 4.26% level logged in October 2023.

Given the inflation outlook, Goldman Sachs sees the bar to increase the pace of rate cuts to 50 basis points as “not excessively high,” said Ramos, while Actinver sees a higher probability of a 25-basis-point cut from Banxico in February, “without ruling out the possibility of a 50-basis-point adjustment.” (https://www.reuters.com/world/americas/bank-mexico-board-sees-larger-rate-cuts-table-2025-01-09/)

Grupo Hotelero Islazul
INOR
Cubasol
AVA Resorts
Los Portales
Realidad Turística
blackanddecker
MAD-HAV Enjoy Travel Group
Walmart
MITM Events
Agexport
Intecap
Nestle
INTERFER
MuniGuate
Barceló Solymar
Herbalife
Cervecería Centroamericana S.A.
Centro Nacional de Cirugía de Mínimo Acceso de Cuba
Instituto Hondureño de Turismo
CUN-HAV Enjoy Travel Group
Servicios Médicos Cubanos
Havanatur
AirEuropa
Hotel Holiday Inn Guatemala
Intecap
Blue Diamond Resorts
INTERFER
Revista Colombiana de Turismo Passport
MuniGuate
Cubacel
Barcelo Guatemala City
Maggi - GLUTEN-FREE
Hotel Barcelo Solymar
Henkel Latinoamerica

Subscribe to our magazine

━ more like this

Pole Dancing in Israel: A New Dimension with BlueDance.co.il

In recent years, pole dancing has experienced a remarkable transformation, shifting from a misunderstood niche to a popular activity combining fitness, self-expression, and empowerment....

A New Luxury Hotel Just Opened on An Idyllic Beach in Cancun, Mexico — And We Were the First to Stay

Waldorf Astoria Cancun opened to the public on Nov. 1, the brand's first new build in Mexico, with two waterfront pools and a fantastic...

Pan American Health Organization Launches Interactive Dashboard on Avian Influenza in The Americas

To monitor cases of avian influenza A (H5N1) in the Americas, the Pan American Health Organization (PAHO) launched an interactive dashboard on the web...

Nicaragua Presents Its New Interoceanic Canal Route to China and Seeks to Compete with Panama

Estimated reading time: 8 minutes With a length of 445 kilometers, in a second attempt, the Nicaraguan president, Daniel Ortega, presents China with a new...

US Lawmakers Join Requests to Extend TPS To Central Americans

The chairman of the US Senate Foreign Relations Committee, Robert Menendez, along with other legislators gathered outside the Capitol this Thursday to express his...
Maggi - GLUTEN-FREE
Hotel Barcelo Solymar
Blue Diamond Resorts
Henkel Latinoamerica
Intecap
Cubacel
Hotel Holiday Inn Guatemala
INTERFER
Barcelo Guatemala City
Revista Colombiana de Turismo Passport
Havanatur
AirEuropa

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Cubasol
Instituto Hondureño de Turismo
INTERFER
Nestle
Herbalife
blackanddecker
Servicios Médicos Cubanos
AVA Resorts
Walmart
MITM Events
Centro Nacional de Cirugía de Mínimo Acceso de Cuba
Grupo Hotelero Islazul
Realidad Turística
Cervecería Centroamericana S.A.
Los Portales
Intecap
Agexport
INOR
MAD-HAV Enjoy Travel Group
MuniGuate
Barceló Solymar