GlobalBanxico delays its reference rate cut more than expected

Banxico delays its reference rate cut more than expected

The Bank of Mexico (Banxico) has delayed its cut to the reference rate more than expected, which stands at 11.25, while other central banks in Latin America have already started with downward adjustments.

Experts attributed this behavior to caution on the part of the central bank regarding inflation indicators, since risks are still perceived.

Janneth Quiroz, director of Economic, Exchange and Stock Market Analysis at Monexassured that some Latin American economies such as Brazil have already made cuts in their rates due to the behavior of their inflation.

”Although it has been decreasing (in Mexico), in the first half of November we saw a small rebound and underlying (inflation) has maintained its downward trajectory, but we see that its levels are still far from the central bank’s objective (3 percent),” he specified.

Gabriel Casillas, chief economist for Latin America at Barclays, agreed that Banxico It has not made cuts precisely because of the behavior of inflation.

In the first fortnight of November, general inflation rebounded to 4.32 percent at an annual rate from 4.25 percent of the previous fortnight, when it had reached its lowest level since March 2021, according to Inegi.

Among the central banks that have already cut their rates is Chile, which last July reduced it to 9 percent, from 11.25.

Brazil has already accumulated three cuts since August and its rate is at 12.25.

Peru also has three reductions with a rate of 7 percent and Colombia is expected to adjust its rate to 13.25 percent before the end of the year.

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