Banxico Governor states peso depreciation poses no extra inflationary pressure

The Governor of the Bank of Mexico (Banxico), Victoria Rodríguez Ceja, stated that recent depreciation of the Mexican peso does not represent additional inflationary pressure beyond what is already incorporated into projections. She noted that the central bank anticipates a gradual decrease in inflation toward a 3 percent target, supported by a low pass-through of exchange rate variations to prices and the bank's credibility.

Economic activity in Mexico has remained largely in line with expectations, despite a moderation in growth rhythm. Rodríguez Ceja indicated that no inflationary pressures are expected from the demand side. However, she acknowledged that ongoing global geopolitical uncertainty could continue to impact financial conditions and potentially influence inflation.

Market dynamics are also being influenced by the divergence in monetary policy between Mexico and the United States. While the Federal Reserve has raised interest rates to combat inflation, Banxico has maintained its reference rate at 6.50 percent. This divergence affects investor behavior, such as carry trades, as global investors react to the interest rate differentials between the two nations.