Mexico, Colombia and Chile Rates: Banxico to BCCh — 2026-09-02
The Mexican peso is gaining momentum as investors rotate out of higher-yielding Brazilian and Colombian carry trades, while Banxico raised its 2026 GDP growth forecast to 1.5%. Meanwhile, Colombia’s COLCAP index surged on easing inflation fears, though the peso softened slightly, and Chile’s IPSA declined amid a stronger dollar.
Mexico, Colombia and Chile Rates: Banxico to BCCh — 2026-09-02
Top developments
Mexican peso outperforms as Brazil/Colombia carry fades
The Mexican peso has begun attracting significant investor attention after being overlooked for much of the year in favor of higher-yielding emerging market currencies like the Brazilian real and Colombian peso. As carry rallies in those markets fade, capital is flowing back into Mexico, strengthening the MXN. This shift highlights a changing risk appetite where stability and improving growth forecasts are becoming more attractive than pure yield differentials.
Banxico raises 2026 GDP growth outlook to 1.5%
The Bank of Mexico (Banxico) increased its annual GDP growth forecast for 2026 to 1.5%, up from its previous estimate of 1.1%. This revision marks the first time in two years that the central bank has raised its growth projection, reflecting resilience in the second quarter where the economy grew 1.4% annually. Despite this optimism, Banxico noted that the potential for growth remains limited and maintained its restrictive monetary stance, keeping the reference rate unchanged.
Colombia’s COLCAP jumps as inflation cools
Colombia’s main stock index, the COLCAP, rose 1.86% to 2,470.26 points on September 1, buoyed by data showing annual inflation slowed to 6.03% in July from 6.14% in June. While the stock market rallied, the Colombian peso eased slightly to 3,209 per US dollar. The deceleration in inflation, driven by softer food and transport costs, is being watched closely by the Banco de la República (BanRep), which has kept rates at a high 12% to combat price pressures.
Chile’s IPSA falls as peso weakens past 937
Chile’s IPSA index dropped 1.14% to 11,315.26 on Tuesday, September 1, as retail sector stocks led the decline. The Chilean peso weakened against the dollar, moving past the 937 level, pressured by a firmer greenback globally. Markets are currently anticipating that the Central Bank of Chile (BCCh) will maintain its key interest rate at 4.5% in its upcoming September meeting, with operators expecting rates to stay at this level for the next two years.
Local view
El Financiero (Mexico) reports that the peso is "squeezing" the attractiveness of the interest rate differential between Banxico and the Federal Reserve, maintaining its strength ahead of President Sheinbaum’s government report.
El Economista (Mexico) notes that while Banxico improved its growth outlook, there are concerns about "limited potential," with investment finally breaking a 19-month slump but still facing headwinds. The publication also highlights debate over whether Mexico is paying too high a premium on its 10-year bonds compared to non-investment grade peers, a claim Hacienda disputes due to improved credit perception.
Context & numbers
- Mexico: S&P/BMV IPC closed at 65,430.32 (-0.08%) on Sept 1; USD/MXN approx. 17.00. Banxico rate held at 6.50% (last decision).
- Colombia: COLCAP at 2,470.26 (+1.86%); USD/COP at 3,209. BanRep rate at 12.00%. July inflation at 6.03%.
- Chile: IPSA at 11,315.26 (-1.14%); USD/CLP > 937. BCCh rate expected to hold at 4.50%.
On the radar
- Banxico Minutes: Investors are awaiting the minutes from the last monetary policy meeting for clues on the duration of the current restrictive stance.
- BCCh Decision: The Central Bank of Chile’s next policy meeting in September is expected to confirm a hold at 4.5%, with operators forecasting no cuts for two years.
- US Fed Spillovers: Oil-driven selloffs and rising US yields are creating volatility across LatAm currencies, with Brazil’s Selic path remaining a key focus for regional investors.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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