The central bank of Mexico (Banxico) announced Thursday that it left the benchmark interest rate unchanged at 4%, as expected.
Highlights from the policy statement summarized by Reuters
“The board was unanimous in the rate decision.”
“The balance of risks for inflation has a bullish bias.”
“In an environment of high uncertainty, risks to inflation, economic activity and financial markets pose significant challenges for monetary policy.”
“Recent shocks that have affected inflation, necessary for the adjustment of relative prices to occur in an orderly manner, so as to avoid an impact on price formation and inflation expectations.”
“The revised forecasts for headline and core inflation show short-term levels above those published in the last quarterly report.”
“Both headline and core inflation are still expected to converge toward the 3% target starting in the second quarter of 2022.”
“Annual headline inflation increased more than expected in April.”
“Inflation expectations for 2021 rose, those for the medium and long term remained stable at levels above the 3% target.”
Market reaction
The pair USD/MXN dipped on this announcement and was last seen losing 1.05% on the day at 19.9455.
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