The next monetary policy decision of the Bank of Mexico, scheduled for March 27, could involve an additional reduction of half a percentage point in the interest rate, bringing it to 9.0 percent. The possibility of this cut is largely conditioned by the agreements Mexico reaches with the United States to avoid the imposition of tariffs.
The minutes of the meeting on February 6 revealed that one board member highlighted the favorable evolution of inflation, especially in the context of the non-implementation of tariffs so far. However, it was noted that the possible impacts of trade and migration disturbances will depend on various factors, such as the exchange rate, economic dynamics, and the magnitude of the shocks.
Another member supported the idea of a new cut of 50 basis points in the interest rate in March, although it was indicated that this would not be the norm from now on. It was emphasized that, despite the challenges facing the country, the risk balance is less adverse compared to previous years.
A member of the Banxico Board emphasized the need to be cautious and patient in conducting monetary policy, stressing that adjustments should not be accelerated until greater certainty is obtained. The importance of maintaining progress in core inflation to achieve a lasting solution to the inflation problem was highlighted.
Alberto Ramos, an economist at Goldman Sachs, warned about the risks of anticipating monetary normalization due to uncertainty regarding global trade policy. Despite this situation, another cut of 50 basis points in March is considered feasible, although scenarios that may arise will continue to be assessed.
Four members of the Banxico Governing Board agree on the convenience of continuing with cuts to the reference rate and even making a new cut of 50 basis points, despite the uncertainty generated by U.S. policies. The goal of keeping inflation at 3.0 percent is a common objective, although the importance of reinforcing credibility in this commitment is emphasized.
Analysts from Grupo Financiero Banorte and Valores Mexicanos also foresee a possible cut of 50 basis points in March, supporting the vision of maintaining caution in light of the current environment's risks.
