The Mexican currency closed official prices this Thursday with a slight appreciation of 0.07 against the dollar, spinning its fifth day appreciating, after the Governing Board of the Bank of Mexico (Banxico) increased the reference interest rate by 75 basis points, placing it at 7.75 percent.
With this, the Mexican currency ended at 20.0022 units per dollar compared to the closing of 20.0168 on Wednesday, data from Banxico show.
In the first hours of trading, the exchange rate showed a marginal depreciation of 0.07% or 1.4 cents, to 20.0553 pesos per greenback, after the inflation data in Mexico was published, which reached 7.88% per year in the first fortnight of June, above the market forecast of 7.7 percent.
Gabriela Siller, director of Economic Analysis at Banco Base, explained that the stability of the Mexican peso in Thursday’s session responded to the fact that the market anticipated that the Bank of Mexico would raise the interest rate by 75 basis points, following the same pattern as the US Federal Reserve last week.
“The appreciation of the peso is due in part to market caution and the Bank of Mexico’s monetary policy decision, which raised the interest rate by 75 basis points to 7.75%, in line with market expectations,” he commented.
Siller said that “since the Mexican central bank adopted the interest rate as an operational target in 2008, it had never made an increase in the rate greater than 50 basis points.”
For Banorte’s Economic Analysis team, Banxico’s position will continue to support the peso, estimating a limited appreciation due to the resistance of 19.75 and 19.80 pesos per dollar, which it could reach in the short term.