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Citi See Banxico Terminal Rate At 9.75%

MEXICO
  • Citi Economics recently upgraded its forecast for Mexico interest rates. After the terrible 1H Aug print, Citi think inflation expectations will continue to worsen, increasing worries among Banxico Board members over their de-anchoring.
  • They now call for 75bp in Sep, with another 50bp in November, for a terminal rate of 9.75%.
  • They continue to expect three 25bp cuts in 2H23, for a policy rate of 9.00% by the end of 2023.

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