Commerzbank anticipates a Banxico rate hold, citing the need to evaluate prior easing cycles as inflation persists slightly above the 3% target, though dovish risks remain present.
Commerzbank expects Banxico to keep rates unchanged after roughly 300 bps of cuts last year and two more this year, with inflation slightly above the 3% target. A pause avoids further easing and supports the peso, but the cited dovish risks leave the near-term bias mixed.
It expects Banxico to keep rates unchanged.
The forecast flags dovish risks even though a hold is expected.
Commerzbank analyst Norman Liebke forecasts that Banxico will maintain current interest rates following a cycle of 300 basis points in cuts last year and two additional reductions this year. The central bank is expected to pause as it assesses the impact of previous easing measures while inflation remains slightly above the 3% target.
Commerzbank expects Banxico to keep rates unchanged, pausing after a series of cuts throughout the last year.
While a rate hold is generally supportive of the currency, persistent dovish risks and inflation levels near the target leave the near-term bias uncertain.