Citi Mexico's September 'Expectations Survey' reveals that most private economists anticipate the Bank of Mexico (Banxico) will keep its main reference rate unchanged, with forecasts suggesting the rate will remain at 6.50% at least until the end of 2027. The expected range for the rate fluctuates between 6.25% and 6.75% [1]. The survey also projects the USD/MXN exchange rate to finish at 17.50 by the end of the current year, and to reach 18.07 by the end of 2027, a decrease from the previous estimate of 18.24 [1].
Inflation is forecasted to end at 4% for 2026, with the core inflation component also expected to be at 4% [1]. Mexico's Gross Domestic Product (GDP) is projected to grow by 1.3% in 2026, up from 1.2% year-on-year, and by 1.8% in 2027, consistent with the previous survey. Estimates for 2027 GDP growth range from 1.0% to 2.3% [1].
The survey underscores Banxico's commitment to maintaining low and stable inflation, targeting a midpoint of 3% within a tolerance band of 2% to 4%. Banxico's monetary policy, primarily guided by interest rate decisions, is influenced by the US Federal Reserve, with meetings held eight times a year, typically a week after the Fed's own meetings [1].
Economists' expectations for a prolonged period of steady rates suggest a cautious approach by Banxico, likely aimed at preserving currency stability and preventing capital outflows. The forecasted exchange rate and inflation figures indicate confidence in the Peso's resilience and moderate economic growth over the next several years [1].
CONCLUSION
The Citi survey signals that Banxico is expected to maintain its current interest rate policy through at least 2027, with the Peso holding below 18.00 and inflation remaining stable. Market sentiment appears cautiously optimistic, reflecting confidence in Mexico's monetary stability and moderate economic growth. Investors may interpret these projections as supportive for the Peso and indicative of a steady macroeconomic environment.