Mexican Peso: Restrictive Banxico stance supports MXN carry – Rabobank
Rabobank’s Molly Schwartz and Christian Lawrence note that Mexico's central bank, Banxico unanimously kept the overnight policy rate at 6.50% on August 6 and continues to judge the stance as appropriate.
Rabobank's analysts, Molly Schwartz and Christian Lawrence, have observed that Mexico's central bank, Banxico, maintained its overnight policy rate at 6.50% on August 6 and is set to keep this stance appropriate throughout 2026 and 2027. Despite ongoing inflation convergence being delayed until Q4 2027, Banxico remains inclined towards cautiousness due to the uneven risks in the market.
Banxico Governor Cuadra had earlier announced his agreement with the "monetary policy stance," emphasizing its suitability for tackling economic challenges, both domestic and international. Rabobank's forecast indicates that USD/MXN will trade within the 17-18 range over the next year, owing to the comparatively higher interest rates in Mexico, thus bolstering the Mexican Peso carry demand.
Banxico's Governing Board unanimously decided to hold the target for the overnight interbank interest rate at 6.50%.
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