Merrill Lynch: Banxico To Hold Benchmark Rate Friday

Merrill Lynch says it expects Banxico (Mexico’s central bank) to keep the benchmark interest rate unchanged at 7% at this Friday’s monetary policy meeting and also foresees the Bank keeping it on hold until the end of the year. Recent inflation data “reinforce Banxico’s and (by now) the market’s belief that the up-tick in inflation is indeed temporary and that, come December, inflation will close the year under the 4.00% target ceiling”, added Merrill Lynch. The Bank said it believes a slowdown in growth from now on will allow Banxico to ease up in the first quarter of next year and end the year at 6.25%, although it warned that “the pace of US growth will remain a key issue.”