Mexico’s central bank, as widely expected, left its policy rate unchanged at 11.25% at today’s Board meeting and the accompanying statement remained very hawkish. We think Banxico will be the last major central bank in the region to begin an easing cycle, probably at its first meeting of 2024 in February. We currently think that the policy rate will be lowered by 200bp to 9.25%, by end-2024, but the risks are increasingly tilted towards rates staying high for longer.
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