Banxico cuts its policy rate 50bp to 6.0% at an unscheduled meeting, as we anticipated

Summary

We expect Banxico to take the policy rate to 3.0% by year-end. In an unanimous vote, Banxico lowered the policy rate by 50bp to 6.00%.

Key points

• Key points:
• May’s scheduled meeting was not canceled; another cut of at least 50bp will surely come at that meeting
• More aggressive easing is warranted; we expect a 3.0% policy rate by year-end
• In a separate statement, Banxico also announced a series of unprecedented and welcomed liquidity measures

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