Banxico recently adjusted its monetary policy meeting calendar in order to make a decision right after the FOMC meetings. Banxico will meet on July 30 that is one day after the today's Fed decision, which will be held today. The board mentioned that the relative monetary position with the US has an important effect in the evolution of the USD-MXN, inflation expectations and price dynamics in Mexico, motivating the adjustment.

"Because our base case scenario is a September hike by the US Fed, Banxico should be hiking in that month too", says Barclays.

Nevertheless, the board is still facing a dilemma since the economy is still far from booming and inflation will likely continue to stay below target, suggesting no need to move. On the other hand, the recent MXN depreciation might put additional pressures on the CPI as the components that offset the recent price pressures in durable goods prices in H1 (lower energy and services prices) will not be present in H2, adds Barclays.

"Hence the board may expect inflation to accelerate (annual durable goods inflation has accelerated to 2.8% in H1 July from 0.8% in December 2014). So far, inflation continues to surprise the markets on the downside, curbing these fears, Because the US Fed will likely remain on hold, Banxico should do as well but under a neutral tone, given the recent MXN performance and the potential risks. We think that the domestic conditions are supportive for keeping inflation under control", according to Barclays.