The stronger-than-expected Mexican inflation figure of 8.8% y/y in the first two weeks of September, coming alongside the hawkish Fed decision yesterday, means that we now think Banxico will raise interest rates by 75bp, to 9.25%, next week. We also now expect a bit more tightening in this cycle than before and think that the policy rate will reach 10.50% by early next year (previously 10.00%).
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