The Bank of Mexico (Banxico) could cut interest rates by 50 to 25 basis points, following the line of the United States Federal Reserve (Fed), said Gonzalo Aguilera, president of the Banking Center of the State of Chihuahua.
The director of the Actinver Financial Center in Chihuahua also explained that the institution projects that, by the end of the year, the reference rate will be at 10 percent, so they expect a reduction of another 75 basis points and the projections of the Association of Banks of Mexico (ABM) would still need to be verified.
With the interest rate currently at 10.75 percent, they believe they can make three additional cuts of 25 basis points during the remainder of the year.
Gonzalo Aguilera explained that, for the first time in more than four years, the Fed cut the reference rate by 50 basis points to place it in a range of 4,755.00 percent.
He said that they rarely make cuts of more than 25 basis points in a single session, which he attributed to the fact that a strengthening of economic growth in the United States must first be noted and, with inflation already under control, it is time to step on the accelerator of growth that was beginning to be repressed by high interest rates.
In the case of Mexico, he said, he expects that by the end of next year the reference interest rate will be around 8 percent, in order to promote consumption and economic growth.
Carlos Carrasco, deputy director of Inversiones Actinver, previously pointed out during the Current Economic Outlook conference in Mexico that by cutting its GDP forecast from 2.4 to 1.5 percent for 2024, Banxico is forced to reduce the interest rate to encourage economic growth.
When the central bank lowers the interest rate, it boosts consumption, since at the current levels it is restrictive, which means that it slows consumption and the request for credit, he explained.
On August 8, Banxico decided to lower the interest rate to 10.75 percent from the previous 11 percent, the next monetary announcement from the central bank is scheduled for September 26.
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