Banxico’s Restrictive Stance Bolsters Mexican Peso Carry, Rabobank Says

On August 6, Banco de México (Banxico) left its benchmark interest rate unchanged at 6.50%, with a unanimous vote. Rabobank analysts Molly Schwartz and Christian Lawrence highlight that policymakers continue to view the current monetary stance as restrictive.

This policy posture bolsters the attractiveness of the Mexican peso for carry trades, where investors borrow in low-yielding currencies to invest in higher-yielding ones. The central bank’s hawkishness at a time when many peers are easing supports the peso’s yield advantage.