The Bank of Mexico (Banxico) could cut its reference rate despite the fact that the Federal Reserve of the United States has not, affirmed the new deputy governor Gabriel Cuadra García. According to him, there is room to lower the interest rate in Mexico because the country has a more restrictive stance than the United States.
Cuadra García pointed out that the interest rate differential between Mexico and the United States exceeds the historical average and noted that one of the challenges is to achieve inflation reaching the 3% target. Despite the uncertainty caused by the presidency of Donald Trump and the Fed's pause in its interest rate decisions, Cuadra García stated that Banxico still has room for maneuver.
The new deputy governor, ratified by the Finance and Public Credit Commission of the Senate of the Republic, has been well received by the market due to his background as a researcher and monetary policy manager at Banxico. He is expected to align with the "dove" bloc within the central bank, supporting interest rate cuts.
Analysts anticipate that Banxico will continue its cycle of cuts despite the uncertainty generated by Trump's policies. A cut of 50 basis points is projected for February and another in March, given the favorable inflation levels and lower expectations for economic growth. The next meeting of Banxico's governing board will take place on February 6, where the new deputy governor will participate.
