Reuters://Realtime/Verb=Open/Url=Cpurl://Apps.cp./Apps/CB-Polls?Ric=Mxcbir%3Deci Poll Data
By Gabriel Burin
Buenos Aires, Dec 16 (Reuters) - Mexico's Central Bank Is Set to Deliver a Fifth and Final Quarter-Percentage Point Rate Cut of the Year on Thursday, a Reuters Poll Found, in a Possible Split Decision With Some Policymakers Leaning Towards a Larger Reduction.
The Bank of Mexico, Known as Banxico, Started Lowering the Cost of Credit in March, Applying Four 25 Basis Point Cuts Since Then to 10.25% Currently From a Record 11.25% as Inflation Cooled.
While the Consensus View in the Survey Pointed to Another Quarter-Percentage Point Reduction This Week, It Is Expected to Be a Close Call Between That and a Potential Half-Percentage Point Cut, Forecast by a Few Banks Like J.P. Morgan.
"We Anticipate a Difficult Decision for Banxico... on One Hand, Inflation Continues to Fall Gradually. However... It Remains at Practically the Same Levels as Last Year," Scotiabank Analysts Wrote in a Report, Predicting a 25 Basis-Point Cut.
Scotiabank's Forecast Was in Line With the Median Estimate of 22 Economists Polled Dec. 11-16 That Saw a Reduction to 10.00% From 10.25% on Dec. 19. of the Total 22 Respondents, 20 Saw a 25 Basis-Point Cut and Two a 50 Basis-Points Move.
Mexico's 12-Month Headline Inflation Rate Slowed More Than Forecast in November to 4.55% From 4.76% in October, as Latin America's No.2 Economy After Brazil Goes Through a Period of "Notable Weakness".
Core Inflation - Which Excludes Volatile Energy and Food Prices - Also Declined, to 3.58% From 3.80%. However, the Headline Measure Remained Above Bank of Mexico's Target of 3% Plus or Minus One Percentage Point.
Scotiabank Economists Cited Different Possible Scenarios for the Upcoming Decision by Banxico's Five-Member Governing Board, Including Even a Potential 3-2 Vote in Favor of a Larger 50 Basis-Point Move.
Last Month's Decision for a 25 Basis-Point Cut Had Been Unanimous, Reaffirming the Bank's Cautious Approach With Warnings Against Any Hasty Move in the Face of Higher Uncertainty Over Future Policies in the United States.
But a Few Days Following November's Meeting, in an Interview With Reuters, Banxico's Governor Victoria Rodriguez Hinted at a Possible Vote for a Bigger Reduction, Depending on the Inflation Outlook.
The Bank of Mexico's Verdict Will Come One Day After the U.S. Federal Reserve's Last Meeting of 2024. the Fed Is Expected to Cut Rates by 25 Basis Points and Pause in January Amid Concerns About Rising Inflation Risks.
(Reporting and Polling by Gabriel Burin in Buenos Aires and ANA Isabel Martinez in Mexico City)
((Gabriel.burin@Thomsonreuters.com ; +54 11 2039-6646))
