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Banxico Release The Minutes Of The March 24 Meeting

MEXICO
  • Link to Banxico March meeting minutes: https://www.banxico.org.mx/publications-and-press/minutes-of-the-board-of-governors-meetings-regardi/%7BA0D44AF3-12F7-5ACC-A9C6-A2B5221623AA%7D.pdf
  • Within the minutes one member notes:
    • “Given the aforementioned balance of risks, looking ahead, the policy response should be moderate and gradual, avoiding taking the reference rate to an excessively restrictive level.”
    • “He/she pointed out that the interest rate levels anticipated by both private sector analysts and market traders are too high, considering the level of deviation of inflation from its target, and the slack conditions in Mexico relative to other economies.”
    • “He/she warned that the Mexican economy shows weakness precisely where monetary policy has a direct influence, such as the deterioration of credit for productive purposes, the stagnation of investment, the lack of dynamism in construction, the fall in consumer credit, and the reduction in domestic sales of new automobiles.”
  • Another member argued that decisions should be taken cautiously but greater tightening than than the Fed could be required:
    • “…at least in the short term, it is necessary to respond to the Federal Reserve's cycle of interest rate increases with proportional ones in order not to relax the relative monetary policy stance, for which there is no room for maneuver.”
    • “He/she also pointed out that Banco de México must remain attentive to any possible effects of the Federal Reserve's monetary tightening on financial markets, but without acting mechanically. He/she pointed out that a greater tightening than that of the Federal Reserve could be required when the outlook for domestic inflation so demands, but without introducing excessive monetary restriction.
    • “He/she stated that given the possibility of inflation reaching its peak in the next quarter and then begin declining, decisions should be taken cautiously.”
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