Banxico expected to hike its benchmark rate - RBC Capital Markets

The central bank of Mexico will announce its monetary policy decision on Thursday and Analyst(s) at RBC Capital Market see the bank to raise its key benchmark rates.

Key Quotes:

"Banxico is expected to hike its benchmark rate from 5.75% to 6.25% as a response to the significant increase in realized and expected inflation during January. At the same time, we think the press release will underline the transitory nature of shocks in gasoline prices, as an additional attempt to anchor longer-term expectations. A 50 bp hike will also sweep away some speculative activity and help to prevent aggressive outflows. The risk to our view is that Banxico hikes only 25 bp, taking advantage of the recent stabilization of USD/MXN."