Chihuahua.— By cutting its GDP forecast from 2.4 to 1.5 percent for 2024, the Bank of Mexico (Banxico) is obliged to reduce the interest rate to encourage economic growth, said Carlos Carrasco, deputy director of Inversiones Actinver.
The above was announced during the conference Current Economic Outlook in Mexico, which he gave together with Alejandro Martínez Díaz, director of the Actinver North division.
He said that the expectation is that Banxico will cut the interest rate, since the underlying inflation is at the target of 3 percent per year +/- one percentage point, while the general inflation is at 5 percent, largely affected by the drought.
He added that by reducing Mexico’s economic growth expectations, Banxico practically reinforces the idea that it is obliged to lower the interest rate.
When the central bank lowers the interest rate, it boosts consumption, since at the current level, 10.75 percent, it is restrictive, which means that it slows consumption and the request for credit, he explained.
Regarding the exchange rate forecast, he noted that it is 20 pesos per dollar for the end of the year and during 2025.
He explained that the volatility of the exchange rate is 10 percent, which means that it can rise from 20 pesos to 22 pesos or go from 20 pesos to 18 pesos; however, it is more likely to increase due to all the risks that are observed in the environment.
In this regard, he pointed out that the peso is being “hit” by factors such as the upcoming elections in the United States, the uncertainty over judicial reform and the upcoming review of the T-MEC.
“There are many factors that are working against the exchange rate and this can be leveraged by investing in dollars,” he said.
Gonzalo Aguilera, director of the Actinver Financial Center in Chihuahua, explained that the institution has investment strategies to face the challenges and take advantage of the opportunities that are observed for the rest of the year and 2025.
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