Mexico: Banxico delivers another 25bps rate cut – Rabobank

Rabobank analysts note that Banxico has cut rates 25bp to 7.25% on December 19th in line with analyst (and Rabobank) expectations.

Key Quotes

“The decision wasn’t unanimous but in contrast to previous meetings only one member dissented in favour of a 50bp move rather than two.”

“We do not yet know who the dissenter was but given that both Esquivel and Heath dissented at previous meetings, it is likely that Esquivel was the lone voice this month.”

“The statement struck a less dovish tone than in recent meetings and although the Bank does not appear to be resting on its laurels, noting that “ the balance of risks for world economic activity remains biased to the downside”, Banxico also highlights its view that some of the main risks may have subsided somewhat – particularly in relation to trade.”

“We expect USD/MXN to primarily trade a 19.10 to 19.60 range in the next 1-3 months.”