Banxico Post-meeting: 8.50% the high? - Rabobank

Analysts at Rabobank point out that Banxico raised rates 25bp to 8.25% at its December 20th 2018 meeting and they are seeing room for one more 25bp hike in this cycle to a final rate of 8.50%.

Key Quotes

“This was expected by the majority of analysts surveyed by Bloomberg (16 out of 24) Prior to the decision, the MXN OIS market implied a 72% chance of a 25bp hike.”

“The decision was unanimous.”

“We see room for USD/MXN to test 19.80 but we expect 20-21 to dominate in 2019.”