Banxico's expected further increase in August

It was not two weeks ago that Banco de México raised its benchmark rate to 7.75% and economists are already expecting at least one more increase in the policy meeting monetary policy of August.

According to Bloomberg economists give a 96% probability that the central bank will shift its interest rate upwards at the next meeting scheduled on August 2, since Au- Beyond the electoral question, the expectations of inflation are still contaminated, say the specialists.

Alberto Ramos, economist at Goldman Sachs said that in the minutes of the Banxico meeting, to be published this week, they expect members of the Central Bank Board that some of the risks Inflation hikes reported at previous meetings began to materialize, that is to say an additional depreciation of the peso and an increase in the price of energy.

"As such, we expect directors that they believe that the balance of inflation risks has deteriorated since the last meeting and remains biased upward.Finally, we expect that the bill will argue that the risk that inflation is converging towards its goal at a slower than expected rate has increased, which would imply that the achievement of the target of 3.0% could be delayed if the monetary policy is not adjusted, "Ramos said.

Joel Martínez, economist at the financial brokerage firm SIF-ICAP notes that until Friday, June 29, the increase in the reference rate had an effect on a significant decline dollar, with a moderate expectation of closing the exchange rate at the end of 2018.

"Inflationary expectations for 2018 are still very degraded and this maintains the possibility of at least an additional rise in the reference rate," the economist said.

This opinion is also supported by the Bank of Mexico itself, because last week, the deputy governor of the agency, Javier Guzmán confirmed to the market that the monetary authority was ready to raise its interest rate.

He reiterated that the balance of risk for inflation remains skewed upward, noting that it might take longer for inflation to reach its target of 3.0%. He also pointed out that the possibility of a further increase to the benchmark rate can not be excluded, since they must adhere to a monetary policy preventive .