By Harshal Babla 12-02-2020

Banxico To Maintain A Cautious Stance

(3 min read)
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Banxico is expected to continue its easing cycle with another 25bps rate cut to 7.0% on Thursday. All but one of the 23 respondents in the latest Citibanamex survey expect a 25bps cut and the market is fully priced for 25bps. This will make the fifth consecutive rate cut from Banxico but will still leave the policy rate amongst the highest in EM.  

We expect an unchanged vote split (4-1) in favour of a 25bps cut, accompanied with a dovish tone given weak growth, a highly restrictive monetary policy stance (real rates are at ~4%), and reduced domestic uncertainty creating a ‘window of opportunity’ to cut rates ahead of a relatively busy calendar in the second half of the year.

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