Analysts at Goldman Sachs, Intercam Banco, and consulting firms Pantheon Macroeconomics and Oxford Economics agree that the tone of the statement remains with a hawkish bias, which in monetary language refers to less tolerance for inflation.
They do not expect the increases in the funding rate to accelerate and agree to expect a further increase in the rate of another 25 basis points for the December decision, which would leave the rate at 5.25 points.
The economist for Latin America at Goldman Sachs, Alberto Ramos, highlighted that the Governing Board emphasizes that the origins of the inflation shocks are transitory but persistent in their magnitude.
When the Governing Board warns in the statement of the fourth increase in the rate, that “it considers it necessary to continue strengthening the monetary stance, adjusting it to the path required for inflation to converge to its target of 3% over the forecast horizon” , underscores our consideration of a less inflation-tolerant stance, he argued.
Santiago Fernández, an economist at Intercam, explained that when the central bank admits that the duration of the shocks that are generating inflation is uncertain, it is raising the risks of further rate hikes.
From London, the senior economist for Latin America at Pantheon Macroeconomics, Andrés Abadía, reads that Banxico’s indication is that it will advance the normalization of rates and “leaves the door wide open for further adjustments in the next meetings.”
The new Governor
The composition of the Board’s vote, four to one with Lieutenant Governor Esquivel immovable from his position not to raise the rate, is another signal for analysts.
According to the senior economist at Oxford Economics, Joan Domene, in the context of the departure of Governor Alejandro Díaz de León from Banco de México, it opens the possibility that the bias of the next decisions is more dovish.
Dovish, in monetary language, indicates openness to stimulating the economy by encouraging people to spend more money on goods and services. Then the rate is lowered.
Eduardo Suárez Mogollón, Scotiabank’s vice president of economic analysis for Latin America, considers, on the other hand, that it is too early to assume that the next governor, Arturo Herrera, will be inclined.
Reference-www.eleconomista.com.mx