Is BANXICO preparing to hike interest rates?

The minutes from this month’s interest rate setting meeting in Mexico, released earlier today, were unambiguously hawkish. But while the chances of an interest rate rise in the next few months have clearly increased, we don’t think that it is a done deal quite yet. In fact, while it is becoming an increasingly close call, we think that it is still more likely than not that interest rates will remain unchanged at 4.5% for the remainder of this year.