24 November 2022 | Other

Central Bank of Mexico is not going to stay behind the FRS in rate decisions

The central bank of Mexico is taking the example from the FRS in its decision on the key rate. On Wednesday, Bank of Mexico board member Jonathan Heath claimed that a premature reversal could weaken the Mexican currency.

He said that in the short term it is very important to take actions similar to the FRS.

Analysts have no consensus regarding when the current cycle of interest rate increases by the central bank of Mexico Banxico will end.

The next meeting of the central bank of Mexico will be in December. Heath also assumes that Banxico will raise the cost of borrowing again. He believes that further rate rises are necessary to keep inflation under control. Recall that the level of the base interest rate in Mexico is now 10%.

According to Heath, in November, annual core inflation in Mexico will reach 8.6%-8.7%. And by the end of the year it should peak.

He suggested that, in case of unforeseen circumstances, core inflation could be around 4% by the end of 2023.

In his point of view, it is reasonable to think and analyze the consequences for the economy after taking inflation under control.

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