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MNI Banxico Review – March 2024: Begins Easing with Cautious 25BP Step

Banxico’s governing board decided to cut the overnight rate by 25bps to 11.00%. One member of the committee voted to keep policy unchanged.

Executive Summary

  • Banxico’s governing board decided to cut the overnight rate by 25bps to 11.00%. The decision was not unanimous, with deputy governor Irene Espinosa voting to maintain the target for the overnight rate at 11.25%.
  • The committee chose not to commit to future rate moves, remaining heavily in data-dependent mode, which should provide the central bank with flexibility ahead.
  • While analysts are not ruling out a potential pause in the easing cycle, consensus appears to be building around consecutive cuts for the remainder of 2024.
  • Markets were little changed on the decision, with most analysts remaining constructive on the MXN in the short-term.

Click to view the full review:

MNI Banxico Review - March 2024.pdf

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Executive Summary

  • Banxico’s governing board decided to cut the overnight rate by 25bps to 11.00%. The decision was not unanimous, with deputy governor Irene Espinosa voting to maintain the target for the overnight rate at 11.25%.
  • The committee chose not to commit to future rate moves, remaining heavily in data-dependent mode, which should provide the central bank with flexibility ahead.
  • While analysts are not ruling out a potential pause in the easing cycle, consensus appears to be building around consecutive cuts for the remainder of 2024.
  • Markets were little changed on the decision, with most analysts remaining constructive on the MXN in the short-term.

Click to view the full review:

MNI Banxico Review - March 2024.pdf