Banxico, USDMXN, corona virus – the Points of discussion:
- The Bank of Mexico reduced its policy rate to 5.50%, in line with expectations
- USDMXN share price has fallen in response to the declining rate of the
- COVID-19 the impact is likely to influence future policy decisions
Banco de Mexico reduced its policy rate by 50 basis points on Thursday, in line with expectations. The key rate now stands at 5.50% for the central bank of mexico, the lowest since 2016. This follows his second emergency since the corona virus, the pandemic began, and with the help of this model, the impact on the economy of Mexico from COVID-19. The Peso’s share prices strengthened slightly, as the rate of loss of income through the son, with USDMXN drop below 24.1050 shortly after the announcement.
USDMXN (1 Min Chart)
The Mexican Peso has weakened considerably this year, in the middle of the COVID-19 pandemic. Against the US Dollar, the Peso is down about 20% year-to-date of the risk aversion continues to support the safe-haven value of the us dollar. Other steps will probably be dependent on the corona virus and its economic impact going forward for the central bank of mexico. The Banco de Mexico’s Board of Governors were unanimous in their decision to reduce the rate to the day-to-day.
Bank of Mexico Overnight Rate Vs. USDMXN
The Board of Governors, the policy statement, it has raised unprecedented challenges to the economy, in the midst of the current pandemic. Concerning inflation, the impact of the fall in energy prices have been considered as the most serious, while the upside risks included stronger depreciation of the Peso. In the future, the policy left the door open to future rate adjustments, the bank will continue to monitor the incoming information and its impact on the bank’s outlook.