The rise in Mexican inflation to 8.0% y/y, its highest rate since 2001, will sustain the hawkish shift seen on the Banxico Board at its latest meeting in June. A 75bp hike in the policy rate in August (to 8.50%) looks almost certain, and the risks to our forecast that the policy rate will end the year at 9.50% increasingly look skewed to the upside.
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