- Pancico sees the decrease in GDP Q4 2024, with the growth of 2024 to 1.5 %.
- The inflation decreases to 3.69 %, and returns to the target range of Pancico 2-4 %.
- Most members expect further decline in inflation, while maintaining the path of price cuts open.
Banco De Mexico, also known as Banxico, has unveiled the Monetar policy record of the decision announced on February 6. The Central Bank decided to reduce Borriwng costs by 50 basis points (BPS) to 9.50 % by dividing 4 to 1, with deputy governor, Jonathan Heath, supports a 25 -point rate reduction.
The most prominent major landmarks
All members indicated that the weakness of the Mexican economy intensified in the fourth quarter of 2024.
Most members stated that, according to flash estimates, the gross domestic product was contracted with regard to the previous quarter. They highlighted that the annual GDP growth would be 1.5 % in 2024 as a whole, unlike growth above 3 % in each of the previous two years.
Most members indicated that the investment was significantly slowing in 2024.
The majority expected that the Mexican economy will continue to grow at low rates in 2025.
Some members stated that the risk balance of growth is biased to the negative aspect.
Most members have agreed that the potential impact on commercial flows between Mexico and the United States will lead to a decrease in Mexican economic activity.
All members agreed to have great progress in solving the inflationary ring derived from the shocks of the epidemic
And the war in Ukraine.Most members indicated that the basic inflation behavior reflects the progress that has been achieved. They commented that inflationary expectations seem more convenient than in the most important moments in the inflationary ring.
Most members noted that since the last monetary policy meeting, the main inflation fell to 3.69 % in the first two weeks of January 2025.
Most members highlighted that the main inflation has returned to the variation range 2-4 % for the first time since.
Another member added that inflation the annual title has decreased 501 basis points since the height of the current inflationary episode. One of the members confirmed that, however, it remains higher than the goal.
Most members stated that the last decrease in inflation in the title was associated with a significant decrease in unlimited inflation.
The majority noted that in the latest basic reading inflation was 3.72 %. They commented that it was less than 4 % for four and a half months.
Most members stressed the importance of the expectations channel in transmitting monetary policy. They highlighted that these
It remained firmly despite the complexity of the last inflationary episode. They emphasized that this is the result of the response of Panco de Mexico.Most members stated that inflation is expected to continue to decrease as expected.
Pancico is common questions
Mexico Bank, also known as Pancico, is the central bank in the country. Its mission is to maintain the value of Mexico, Mexican Peso (MXN), and control of monetary policy. To this end, its main goal is to maintain low and stable inflation within the target levels – at or close to its 3 % goal, the center point in the tolerance range ranges between 2 % and 4 %.
The main tool for banknotes for monetary policy guidance is to determine interest rates. When inflation is higher than the target, the bank will try to tame it by raising prices, which makes it more expensive for families and companies to borrow money and thus cool the economy. The highest interest rates are generally positive for Mexican Peso (MXN) because it leads to higher returns, making the country a more attractive place for investors. On the contrary, low interest rates tend to weaken MXN. The difference in the average with the US dollar, or how Banxico is expected to determine interest rates compared to the Federal Federal Reserve (Fed), which is a major factor.
Pancico meets eight times a year, and its monetary policy is greatly affected by the US Federal Reserve decisions (Fed). Therefore, the Central Bank Resolution Committee usually gathered a week after the Federal Reserve. When doing this, Pancico interacts and sometimes expects monetary policy measures set by the Federal Reserve. For example, after the Covid-19 pandemic, before raising the federal reserve rate, Pancico was first trying to reduce the chances of a significant decrease in the Mexican Bzo (MXN) and to prevent capital flows that could shake the country.
