The Bank of Mexico (Banxico)which exercises the functions of the country’s central bank, has opened the door to carry out a monetary policy in the coming months that pays attention to the evolution of the country’s economy and is unrelated to upcoming rate hikes in the United States by the the Federal Reserve (Fed).
In a conference at the ‘Mexico Capital Markets Forum’, the deputy governor of Banco de México, Galia Borja Gómez, stressed that Mexico began the rate hike cycle “much earlier” than the Federal Reserve, which is reflected in the forecasts inflation for the coming months, which point to a drop in inflation for the last quarter of this year.
This synchronization is not “automatic”
In this way, Borja Gómez has indicated that, although the Fed’s position is “relevant” for the conduct of Mexico’s monetary policy, this synchronization is not “automatic” nor “the objective to pursue”, so in the next few months attention could only be paid to “cyclical conditions of each economy”.
Despite the fact that the Mexican economy may be affected by international monetary conditions in the current context of great risk and volatility, we will assess the magnitude of the increases in the next Banxico meetings”,
Galia Borja explained.
Stable prospects and good interpretation in the markets
During the event, the deputy governor of Banco de México recalled that interest rates in the country stand at 10%, with the aim of dealing with inflation “not seen in decades”, but which remains stable for the next months.
Our forecasts are that inflation will slow down and reach the goal of 3% in the third quarter of 2024″, he highlighted. In this sense, Borja has stressed that, although it continues to be high, inflation in recent months has “surprised downwards”,
being lower than what experts anticipate.
In addition, the deputy governor has focused on the good interpretation and reception that Banxico’s monetary policy decisions have had in the markets. “The Mexican peso is resilient and has been positively affected by prudent and timely monetary policy,” she added.
Finally, in relation to growth forecasts, the representative of the Bank of Mexico has expressed that, compared to other emerging economies that have registered “episodes of significant contraction”, Mexico has recovered quickly.
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