Mexico Leaves Rates Unchanged

As widely expected, Mexico’s central bank has left its monetary policy rate at 4.5%. Bulltick believes the bank will keep rates at this level for the rest of the year on the back of a massive output gap and an appreciating currency, which mitigate inflationary pressures from tax and prices increases. “The economy is emerging from a significant recession and the central bank is unlikely to tighten monetary conditions as the economy gains traction,” it adds. Goldman Sachs also believes the rate will stay at 4.5% for the rest of the year. “The [central bank’s] statement conveys the notion that it is comfortable with the behavior of inflation expectations for the medium and long-term, which are well anchored,” Goldman adds.