Half point cut at the reference rate, Citi provides

The Bank of Mexico (BDEM) will make a half -point cut today at the reference rate, anticipated analysts of the financial sector.

After the first monetary policy meeting of the year, the reference rate – the instrument that marks the cost to which families and companies are financed – will decrease from 10 to 9.5 percent, according to the expectations survey raised by CITI Mexico.

Of the 35 respondents, 27 are waiting for a half -point cut at tomorrow’s meeting, while eight participants await a cut of a quarter.

This survey is carried out every 15 days to areas of economic analysis of various national and international financial institutions, such as BBVA, Santander, Banamex, Bank of America, Oxford Economics, Barclays, among others.

“The reference rate serves as a basis for determining the rates to which banks and financial intermediaries will lend money.

If you upload, the cost of credits will be greater, if you go down, banks will apply lower interest rates, which will encourage consumption, that is, it works as an indicator of the country’s economic situationexplained BBVA, the main financial intermediary in the country.

If the projections presented by CITI were completed, it would be the first time that the BDEM Governing Board makes a trim of that magnitude since the decrease cycle began to the reference rate in March 2023.

Following the high inflation episodes that were taken in 2022, when this indicator reached its highest level in two decades – on top of 8 percent – the Bank of Mexico began to increase the reference rate.