Banxico (Banco de México) is the central bank of Mexico, and its main mandate, set in Mexico's Constitution, is to keep the purchasing power of the national currency stable. Its Governing Board sets the target for the overnight interbank interest rate at scheduled announcements several times a year. Banxico decisions can coincide with higher volatility and wider spreads, including in peso pairs such as USD/MXN.
Also called: Banco de México, Bank of Mexico, Mexican central bank, overnight interbank rate
Hypothetical example
Hypothetically, Banxico's target rate is 8.00% and the forecast is a 0.25 percentage point cut. If the announcement keeps the rate at 8.00%, the decision is different from the forecast.
