• All 24 economists surveyed expect Banxico to lower rates despite inflation ticking up to 3.57% in August.
• Bank of America notes Banxico could ease more aggressively if Fed cuts continue and Dollar weakness persists.

Banco de Mexico (Banxico), Mexico’s central bank is expected to reduce its main reference rate by 25 basis points to 7.50% on September 26, revealed a Reuters poll.

Reuters poll shows unanimous expectations for a 25 bps cut, with analysts eyeing further easing into November

The survey showed that all 24 economists see Banxico’s cutting rates, as inflation edged slightly up to 3.57% from 3.51% but it remains within the 3% plus or minus 1% range. In the last meeting, the bank cut rates on a 4 to 1 vote split with Deputy Governor Jonathan Heath voting to hold rates unchanged as inflation was well above the 4% threshold in the previous month’s print.

Analysts at Bank of America wrote on a note that “Banxico is likely to continue cutting rates well below market expectations as long as the Fed cuts and the US Dollar remains weak.”

Recently released data showed that lower than expected growth in Q2 and “relatively” contained inflation last month, justified gradual easing by Banxico.

When asked of the date of the Mexican central bank’s reduction, 19 of 24 analysts answered September, with high expectations that another 25-bps cut is expected in November, as said by a majority of 16 economists.