Although it is not a rule that the movements made by the Fed are made by the Mexican central bank, it does take into consideration what its American counterpart does to make adjustments to the reference rate.
“It is an important factor because the Governing Board takes into account what the Fed does as one of the factors for Mexican monetary policy, but it is also true that the rate differential is quite wide,” explained Julio César Ruiz, economist head of Citi Mexico.
The expert added that even if the Fed makes fewer cuts than the two it has predicted, Banco de México has room to maintain a high rate differential.
Analysts from Grupo Financiero Ve por Más consider that both internal and external factors in Mexico can revive financial volatility, which is why it is convenient to have this high rate differential between Banxico and the Fed.
It is considered that it will be until the Republican Donald Trump takes office as president of the United States and announces whether or not he will apply the tariffs when more light can be had on the possible decisions of the central banks.
