07:45 AM EST, 11/13/2024 (MT Newswires) -- Mexico's central bank (Banxico) is likely set to cut the policy rate by 25bps on Thursday in a backdrop of easing core services inflation, which is starting to turn a corner amid a challenging context for economic activity, said BBVA Research.

Mexican headline inflation broke a two-month downward streak and inched up to 4.8% year over year in October from 4.6% in September driven by unfavorable base effects.

Core inflation eased for the 21st month in a row to 3.8% year over year with core services inflation falling below 5.0% to 4.98% for the first time since August 2022.

Banxico will likely adjust the Q4 headline inflation forecast to the upside as November and December are months with seasonally high inflation, stated BBVA Research.

Greater exchange-rate volatility following Trump's victory should not derail Banxico's plan to continue removing the excessively high degree of monetary restriction.