Mexico: Banxico bank keeps rates unchanged at 7.5%, MXN steady

• Mexican central bank keeps key rate at 7.5%, highest since 2009. 
• Mexican peso remains steady, posting daily gains vs US Dollar. 

The Bank of Mexico, as expected, kept its benchmark interest rate at 7.50%. The central bank rose rates at the previous two meetings to the highest since March 2009, in order to anchor inflation expectations. Since the last meeting, the Mexican peso appreciated in the market and inflation slowdown. 

Banxico noted that the Mexican economy is growing but facing considerable downside risks. Regarding inflation, risk is on the upside amid potential exchange rate depreciation on NAFTA and potential price shocks (agriculture or energy).

The decision was unanimous. In the statement, Banxico reiterated that it “will act in a timely, firm way to keep medium and long term inflation expectations anchored and achieved the 3% target”

USD/MXN steady 

The Mexican peso remained steady in the market following the announcement. Most market analysts expected no change in rates. The statement from the central bank did not contain surprises. 

USD/MXN is down for the day and heads toward the second lowest close since July, 2017. The Peso continues to be among the top performers of the year.