Survey respondents unanimously expect unchanged rates at 11.25%. Equally, we think Banxico will be more than happy to keep the 600 bps policy rate premium over Fed rates – a position that has kept USD/MXN relatively stable, reduced implied volatility and contributed to the Peso's attractiveness for carry trade strategies.

Loose fiscal and tight monetary policy is normally a very positive environment for a currency and this is why we think USD/MXN will be trading comfortably below 17.00 into 2024.