MEXICO CITY (El Universal).— The strength of the superpeso is close to ending its good moment, in an environment where it is increasingly feasible that the reduction of the reference rate of the Bank of Mexico (Banxico) will begin, said BBVA.
In his report “Mexico Situation”, the chief economist of the financial institution, Carlos Serrano, highlighted that given the reduction that inflation has experienced continuously in the country and the good anchoring of expectations of price behavior, it is highly probable that Banxico begins to lower its rate at its next Governing Board meeting, with a reduction of 25 points.
“It is likely that the best moment of the exchange rate is behind us, but the peso continues to show absolute and relative strength,” said the financial institution’s report.
At the end of the year, BBVA México estimates that the exchange rate will be 18.2 pesos per dollar, in an environment where the electoral process in both the United States and Mexico has not disturbed the markets.
“In the United States 8 years ago there was the issue of Donald Trump, on the night with the results the exchange rate depreciated by double digits, but now the markets, the reason why they are not behaving as they did eight years ago and the type exchange has not reacted to the fact that Trump became the virtual Republican candidate, it is because eight years ago there was a risk of a trade rupture with the United States and Mexico, the future of the relationship is not at stake due to the new treaty.” said Carlos Serrano.
In addition to interest rates, the financial institution recalled that the record income from remittances in the country has also strengthened the exchange rate.
“The story of the superweight continues and is due to short and long-term factors. In the short term there is a high rate differential between Mexico and the United States, which is 565 basis points, also the positioning of investors, there is support for the peso and another important element is the very favorable evolution of remittances, while “That long-term factors have to do with the macroeconomic pillars of Mexico, such as fiscal discipline and prudent management of external sources that allow the economy to fall into problems of external imbalances,” said the chief economist of the BBVA Mexico group. , Arnulfo Rodríguez.
BBVA calculations
In this scenario, BBVA estimates that inflation will close the year at 3.9%, which means that restrictive monetary policy is no longer justified, and it expects that at the end of 2024 the reference rate will be 9.25%.
The financial institution cut its growth forecast for Mexico in 2024 from 2.9% to 2.5%, given a decrease in consumption and weakness in the construction sector and a better generation of jobs.
In the economist’s opinion, the markets do not seem to be very concerned with what may happen either in the elections in Mexico or in the United States, so in the case of our country, the candidates Claudia Sheimbaum and Xóchitl Gálvez have platforms that promise to continue anchoring the macroeconomic variables and in that sense, unlike six years ago, the markets are not showing any volatility with the electoral cycle in Mexico.
Regarding the possibility of the Morena candidate winning the elections, the financial institution said that it offers continuity in macroeconomic terms, which would be expected to maintain respect for the autonomy of the Bank of Mexico, as well as the salary improvement, among others. aspects.
“We still have to evaluate the campaigns and review the messages, but in effect, the Morena candidate is promising a path of continuity on what we have seen in recent years, so, in economic terms we believe that we can assume a continuity scenario,” said.
DayQuote
The peso closed yesterday’s day at 16.67 units, its best level since July 2023
Wednesday’s data
According to the Bank of Mexico (Banxico), the national currency appreciated 0.74%, so the exchange rate closed at 16.67 units, its best level since July 2023. Meanwhile, at counters, the price of the ticket Verde closed for sale at 17.09 pesos, according to Citibanamex.
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2024-04-07 21:18:35
