07:12 AM EDT, 08/09/2024 (MT Newswires) -- The Board of Peru's central bank (BCRP) decided to cut the policy rate by 25 basis points to 5.50% on Thursday, noted BBVA Research.

The BCRP expects inflation to remain close to the center of the target range (2% +/- 1%) in the following months and core inflation to follow a downward trend.

BBVA Research noted it expects additional cuts to the reference rate during the rest of the year. The upcoming moves by the United States Federal Reserve and its impact on the interest rate spread and exchange rate volatility will be key factors for the timing, magnitude and number of these cuts.

Mexico's central bank (Banxico) looked past the jump in headline inflation, rightly so in BBVA Research's view, with core inflation easing and it cut the policy rate by 25bps to 10.75% on Thursday.

The wording of the statement remained cautiously dovish and dismissed the two factors that could have made Banxico push back Thursday's rate cut.

Looking ahead, Banxico's Board members will likely continue to have differing points of view in terms of the inflation outlook, likely leading to additional split decisions in future meetings, according to BBVA Research.