Mexico: Easing at a 50bp rate at the next three meetings – TDS

Banxico cut by 50bps while its statement did not provide a great deal of certainty or guidance, economists at TD Securities report. USD/MXN is trading 23.9257.

Key quotes

“Banxico unanimously cut by 50bps as widely expected, providing a statement focused on the high degree of uncertainty due to Covid-19.”

“While further depreciation in MXN continues to pose an upside risk to inflation, it will not dominate the policy discussion.”

“There is nothing in this statement that convinces us to deviate from our call for 50bp cuts at the next three meetings, followed by two more 25bp cuts to leave the policy rate on hold at 3.50% by year end.”