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MEXICO: Banxico Minutes Reveal Some Discussion About Accelerating Easing Pace

MEXICO
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  • Regarding the possibility of accelerating the pace of rate cuts going forward, one member of the committee said that “given the levels that core inflation has already attained, the magnitude of adjustments could be evaluated”, adding that in this process “the incidence of both the restrictive policy stance that has been maintained and that prevailing on inflation throughout the horizon in which monetary policy operates will be considered.”
  • Meanwhile, another member highlighted that “in the absence of further shocks, discussions could begin regarding the level of reference rate cuts. He/she emphasized that, given the high degree of restriction achieved, even with additional adjustments, the reference rate will remain restrictive, which will be necessary throughout the forecast horizon.”
  • These comments echo those of Banxico Governor Rodriguez who in an interview with Reuters after the meeting said that the board may consider larger interest rate cuts ahead as inflation declines. She said that the inflation outlook had improved very significantly and the economy is in a solid position.
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  • Regarding the possibility of accelerating the pace of rate cuts going forward, one member of the committee said that “given the levels that core inflation has already attained, the magnitude of adjustments could be evaluated”, adding that in this process “the incidence of both the restrictive policy stance that has been maintained and that prevailing on inflation throughout the horizon in which monetary policy operates will be considered.”
  • Meanwhile, another member highlighted that “in the absence of further shocks, discussions could begin regarding the level of reference rate cuts. He/she emphasized that, given the high degree of restriction achieved, even with additional adjustments, the reference rate will remain restrictive, which will be necessary throughout the forecast horizon.”
  • These comments echo those of Banxico Governor Rodriguez who in an interview with Reuters after the meeting said that the board may consider larger interest rate cuts ahead as inflation declines. She said that the inflation outlook had improved very significantly and the economy is in a solid position.