MNI BRIEF: Banxico Lays Groundwork For Possible Cuts-Minutes

The central bank of Mexico will assess the possibility of reducing borrowing costs starting at its next policy meeting in March, according to minutes from its February meeting released Thursday that echoed the message from that policy decision.

"In the next monetary policy meetings, (the board) will assess, depending on available information, the possibility of adjusting the reference rate," the report said.

All members argued in favor of considering such near-term rate adjustments, and only one highlighted that "on this occasion, a first reduction in the reference rate should not be considered, given that headline inflation has recently increased, even more than expected, due to the rebound in the non-core component." (See MNI INTERVIEW: Banxico Should Be Cautious On Rate Cuts-Guzman)

Banxico decided unanimously this month to maintain its overnight interbank interest rate at 11.25% for the seventh straight meeting but dropped an earlier commitment to keeping policy steady for "some time" and instead stated policymakers will assess the possibility of reducing borrowing costs in the coming meetings. (See MNI INTERVIEW: Dovish Banxico More Data-Dependent-Ex-Economist)