The Mexican peso erases initial losses and appreciates after Banxico adjusts inflation forecasts
The peso erased its initial losses this Thursday after Banxico adjusted upwards its quarterly inflation forecasts and maintained its reference interest rate at the historical maximum of 11.25%, as the market expected. The currency was trading at 17.2127 units per dollar, with a slight advance of 0.13% compared to the Reuters reference price on Wednesday, although shortly before it appreciated 0.35%.
In the moments prior to the announcement of monetary policy, the peso depreciated 0.50%. “The appreciation is due to the upward revision of inflation forecasts,” said the director of economic analysis of the Base financial group, Gabriela Siller.
In its monetary policy announcement this Thursday, Banxico reported that it expects a more gradual slowdown in the prices of food goods and services (core inflation) at the end of 2023, and for all of 2024. In the case of general inflation, it revised upwards its estimates for the second, third and fourth quarters of 2024. The central bank continues to expect convergence towards its 3% inflation goal to be achieved in the second quarter of 2025.
The appreciation of the Mexican peso was confirmed with a tweet from Gabriela Siller, stating “The Mexican peso appreciates after the announcement of monetary policy by the Bank of Mexico. The appreciation is due to the upward revision of inflation forecasts.”
With information from Reuters
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