The specialist stressed that although inflation was good, we must wait for the next few months, and that there could be pressure from internal and external factors.
On the domestic side, there is the persistence of service prices and exchange rate volatility; inflation in services continues to show no clear downward trend and remains above 5%.
The Board should remain cautious about its next decisions, Valmex agreed in a report.
Huerta added that Banxico’s Governing Board may not be comfortable with certain factors such as Mexico’s perception of risk and exchange rate volatility.
Since the results of the presidential election were announced, in which Claudia Sheinbaum won by a large majority, the markets have been volatile due to the uncertainty of the reforms that may be approved, specifically, that of the judicial branch.
The reform of the Judicial Branch is one of the most controversial initiatives presented by President Andrés Manuel López Obrador on February 5, which seeks to have a popular election of ministers, in addition to subjecting their salaries to the income limit of whoever occupies the Presidency.
Since September, when activities in Congress and the Chamber of Deputies resumed, the exchange rate has reached levels of 20 pesos due to the uncertainty that this reform may generate.
Volatility will not only depend on what happens in Mexico. This Tuesday, Republican candidate Donald Trump and Democrat Kamala Harris face off in a debate prior to the election in the United States.
The volatility that the presidential candidates’ proposals may generate will also be a factor that will impact the exchange rate and, consequently, will affect the decision taken by the central bank.
