Citibanamex expects Banxico to raise the rate another 75 points this Thursday

Citibanamex expects that this Thursday, November 10, the Bank of Mexico (Banxico) raise another 75 base points the reference interest rate, so that it remains at 10.00%, historical level.

Adrian de la Garza, chief economist at Citibanamexexplained that, with the data for this Wednesday, everything would point to annual inflation having already reached its peak, although pressures on the underlying prevail.

In this sense, it considered that from the decision of monetary politics December, the Banxico The rate would already rise only 50 basis points, so that it reaches a peak of 10.75% in February 2023.

“But we do see a possibility of decoupling the Bank of Mexico from the United States Federal Reserve (FED), that it begins to make less hikes towards 2023 and that even towards the end of the year it completely decouples, “he said.

He added: “already with interest rate drops, now we see it at a peak of 10.75% in February of next year and later with four drops in 2023 to reach a level of 9.75% at the end of that year.”

De la Garza pointed out that until today, the behavior of inflation and expectations have not allowed Banxico to disassociate itself from the FEDWhich doesn’t mean it won’t.

“Already (this Thursday) it would be at 10%, a historically high level for the funding rate. In real terms, it is a very restrictive rate. Already in a scenario like this, where it seems that everything points, if the next data confirm that we have reached the peak of annual inflation, as we think that today’s data seems to confirm, in a scenario like this, in December it would already be in a position to decrease from 75 to 50 points and that as of the first quarter it will dissociate itself from the FED”, said Adrián de la Garza.

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