18 Aug 2015
Banxico remains vigilant on the timing of Fed’s lift off – BBH
FXStreet (Edinburgh) - The research team at BBH believes the Mexican central bank could follow the Fed in hiking its benchmark rate.
Key Quotes
“The bank has stated that it will follow the FED in tightening rates to prevent the fallout from narrowing rate differentials”.
“Banxico even changed its meeting calendar a few months ago to put it more in sync with its northern neighbour”.
“The minutes to the last meeting showed that the decision to keep rates unchanged at 3.0% was not unanimous, with one member voting for a 25 bp hike”.
“The rational of the dissenter was to pre-empt the Fed’s move and the potential disruption it may cause”.
“We never believed that Banxico would move prior to the Fed. In fact, we are not even convinced that the bank will necessarily move in lockstep with the Fed – it will depend on the reaction of the peso. It could even hike by more, depending on market conditions, but we doubt this will be the case”.
Key Quotes
“The bank has stated that it will follow the FED in tightening rates to prevent the fallout from narrowing rate differentials”.
“Banxico even changed its meeting calendar a few months ago to put it more in sync with its northern neighbour”.
“The minutes to the last meeting showed that the decision to keep rates unchanged at 3.0% was not unanimous, with one member voting for a 25 bp hike”.
“The rational of the dissenter was to pre-empt the Fed’s move and the potential disruption it may cause”.
“We never believed that Banxico would move prior to the Fed. In fact, we are not even convinced that the bank will necessarily move in lockstep with the Fed – it will depend on the reaction of the peso. It could even hike by more, depending on market conditions, but we doubt this will be the case”.