inflation to be significantly above target this year but should come back down toward the end of the year.
The Mexico's central bank raises the benchmark interest rate to 6.75% from 6.5%.
They add:
- The decision was unanimous
- balance of risks to growth has downward bias
- perception of probability of more extreme risk materializing has diminished
- Despite favorable performance international financial markets,, doubt remains on external environment
- inflation will be considerably above the bank's target range in 2017
- expect inflation in the final months will start to Trend down towards the goal
- Balance of risks to inflation has deteriorated moderately
- Main challenge faced by central bank is avoiding second round of facts on price formation and keeping expectations of inflation anchored
The USDMXN has moved down on the news but the pair stalled right at the close from yesterday at 18.7775. The price action is choppy still. A break below that close, will be more bearish for the pair technically.
