Mexico Central Bank Diverges From Fed Decision Schedule for 2016

  • Mexico to hold most rate-setting meetings 1-2 weeks after Fed
  • Mexico in July changed 2015 rate schedule to align with Fed

Mexico’s central bank will hold its rate-setting meetings mostly independent of the Federal Reserve next year, a signal that it may be less concerned with being able to react immediately to interest-rate increases in the U.S.

While Mexico’s policy makers in July changed their rate decision schedule for the rest of 2015 to mostly follow the Fed by one day, in 2016 they’ll decide rates the day after the Fed only once, in December, according to a schedule released on the central bank’s website Wednesday. Six of the eight decisions will come one to two weeks after the U.S.

"This is in line with our view that Mexico’s central bank will put less weight on the Fed and more weight on domestic conditions in 2016," Carlos Capistran, the chief Mexico economist at Bank of America, said from Mexico City. "Banxico will likely hike less than the Fed next year."

Mexico has seen inflation tumble to an almost five decade low of 2.21 percent, giving the central bank leeway to maintain the lowest benchmark interest rate in Latin America, at 3 percent, to counter sluggish growth. Economists surveyed by Bloomberg forecast Mexico will probably raise rates next week for the first time since 2008 following an expected increase by the Fed, to keep foreigners from withdrawing capital after the peso tumbled to a record low in September.

For the full list of decision dates, click here.

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