Mexican central bank rate decision: Rates unchanged at 11.0% as expected

• Prior was 11.0%
• Decision was unanimous
• Disinflation process is expected to continue
• Revises 2024 year-end forecast for inflation to 4.00% from 3.6%
• Boosts core inflation in 2024 forecast to 3.8% from 3.5%
• Balance of risks to inflation within the forecast horizon remain to the upside
• Inflationary shocks are foreseen to take longer to dissipate
• Weak behaviour in Q4 2023 is expected to continue in Q1

CPI in Mexico is running at 4.65% y/y with the monthly number running around 0.2%. That’s a nice mix and some good carry with an 11% policy rate, particularly if you believe in onshoring and slowly improving relations with the US and diminishing crime.

USD/MXN dipped on the decision.

This article was written by Adam Button at www.forexlive.com.