News

Banxico Unexpectedly Cuts Rates
The Bank of Mexico reduced its benchmark interest rate by 25 basis points to 6.75% in its March 26, 2026 meeting, unexpectedly resuming the easing cycle. This reduction follows the brief pause in rate cuts that occurred in February after the sequence of easing began in March last year. Mexico’s economic activity showed marked weakness in early 2026 after expanding in the previous quarter, and the Board warned that downside risks from trade tensions and global uncertainty continue to imply risks to the outlook. The decision to cut was taken by a majority of the Board, which judged a reduction appropriate given the current inflation panorama, the weakness in economic activity, and the degree of monetary restriction implemented. Headline inflation rose to 4.63% in mid-March from 3.77% in January, while core inflation remained practically unchanged at 4.46%, remaining above 4%. Despite these near-term pressures, Banxico still projects inflation will converge to its 3% target in Q2 2027.
Published on 2026-03-26

Banxico Unexpectedly Cuts Rates
The Bank of Mexico reduced its benchmark interest rate by 25 basis points to 6.75% in its March 26, 2026 meeting, unexpectedly resuming the easing cycle. This reduction follows the brief pause in rate cuts that occurred in February after the sequence of easing began in March last year. Mexico’s economic activity showed marked weakness in early 2026 after expanding in the previous quarter, and the Board warned that downside risks from trade tensions and global uncertainty continue to imply risks to the outlook. The decision to cut was taken by a majority of the Board, which judged a reduction appropriate given the current inflation panorama, the weakness in economic activity, and the degree of monetary restriction implemented. Headline inflation rose to 4.63% in mid-March from 3.77% in January, while core inflation remained practically unchanged at 4.46%, remaining above 4%. Despite these near-term pressures, Banxico still projects inflation will converge to its 3% target in Q2 2027.
Published on 2026-03-26

Banxico Holds Rate at 7%
The Bank of Mexico left its benchmark interest rate unchanged at 7.00% in its February 5, 2026 meeting, pausing the easing cycle and keeping the rate at its lowest level since May 2022. This pause ends the recent sequence of rate reductions that began in March last year. Mexico’s economic activity expanded in Q4 2025 after the contraction recorded in Q3, although the Board warned that downside risks from trade tensions and global uncertainty persist. The decision to hold was taken unanimously by the Board, which judged a pause appropriate given the current inflation outlook and the need to assess the impact of policy changes. Headline inflation eased slightly to 3.77% in mid-January from 3.80% in November, while core inflation rose to 4.47% (from 4.43%), remaining stubbornly above 4%. Despite these near-term pressures, Banxico now projects inflation will converge to its 3% target in the second quarter of 2027.
Published on 2026-02-05

Banxico Cuts Interest Rate to 7%, as Expected
The Bank of Mexico cut its benchmark interest rate by 25bps to 7% in its December meeting, as expected, bringing it to its lowest level since May 2022. This marks the twelfth consecutive rate cut in an easing cycle that began in March last year, aimed at stimulating economic growth amid sluggish GDP performance and uncertainty over US tariffs. Mexico’s GDP shrank 0.2% in Q3 after stagnating in Q2, prompting Banxico to halve its 2025 growth forecast to 0.3%, though it expects 1.1% in 2026 and 2% in 2027. The decision was split, with Deputy Governor Jonathan Heath voting to hold, reflecting concerns over persistent inflation. Headline inflation rose to 3.8% in November, slightly above expectations, while core inflation, excluding volatile items, remains stubbornly above 4%. Despite near-term inflation risks, Banxico projects inflation will return to its 3% target by Q3 2026.
Published on 2025-12-18

Banxico Cuts Interest Rate to 7%, as Expected
The Bank of Mexico cut its benchmark interest rate by 25 bps to 7% in its December meeting, in line with market expectations, bringing it to its lowest level since May 2022. The decision reflects a cautious easing amid weak domestic economic activity and a moderating global growth outlook, particularly in the US and major advanced economies. Inflation pressures remain, with core inflation showing resilience, though headline inflation rose modestly to 3.8% in November. The central bank noted that the peso has strengthened and government bond yields have increased across most maturities since the previous meeting. Key risks include global trade tensions, geopolitical conflicts, and potential cost pressures that could keep inflation above target. The board expects inflation to converge to the 3% target by Q3 2026, and future rate adjustments will depend on economic activity, exchange rate dynamics, and inflationary pressures. The decision was passed by a 4-1 majority.
Published on 2025-12-18

Banxico Cuts Rates by 25bps to 7.25%, As Expected
The Bank of Mexico cut its benchmark interest rate by 25 bps to 7.25% in its November meeting, in line with market expectations, bringing it to its lowest level since May 2022, and indicated it would consider further easing at future meetings. The decision came amid ongoing concerns about global trade tensions and weakening economic activity in the country. In a statement on Thursday, the bank said it took into account “the weakness of economic activity” and persistent global uncertainty in its decision to lower borrowing costs. Between the first half of September and the first half of October, annual core inflation eased slightly from 4.26% to 4.24%, while headline inflation decreased from 3.74% to 3.63%. In updated forecasts released on Thursday, Banxico maintained its estimate for year-end annual core inflation at 4.2% in the fourth quarter, while projecting headline inflation to converge to the 3% target by the third quarter of 2026.
Published on 2025-11-06

Banxico Cuts Interest Rate to 7.5%, as Expected
The Bank of Mexico cut its benchmark interest rate by 25 bps to 7.5% in its September meeting, in line with market expectations, bringing it to its lowest level since May 2022, and indicated it would consider further easing at future meetings. The decision came amid ongoing concerns about global trade tensions and sluggish economic growth in the country. In a statement on Thursday, the bank said it took into account "weak economic growth" and fluctuating global trade policies in its decision to lower borrowing costs. Wednesday’s data showed annual core inflation hit 4.26% in the first half of September. Banxico targets inflation at 3%, plus or minus a percentage point. Headline inflation also accelerated in the first half of September, rising to 3.74% from 3.49% in the first half of August. In updated inflation forecasts released on Thursday, Banxico raised its estimate for year-end annual core inflation to 4.0% in the fourth quarter, up from its previous estimate of 3.7%.
Published on 2025-09-26

Banxico Cuts Interest Rate to 7.5%, as Expected
The Bank of Mexico cut its benchmark interest rate by 25 bps to 7.5% in its September meeting, in line with market expectations, bringing it to its lowest level since May 2022, and indicated it would consider further easing at future meetings. The decision came amid ongoing concerns about global trade tensions and sluggish economic growth in the country. In a statement on Thursday, the bank said it took into account "weak economic growth" and fluctuating global trade policies in its decision to lower borrowing costs. Wednesday’s data showed annual core inflation hit 4.26% in the first half of September. Banxico targets inflation at 3%, plus or minus a percentage point. Headline inflation also accelerated in the first half of September, rising to 3.74% from 3.49% in the first half of August. In updated inflation forecasts released on Thursday, Banxico raised its estimate for year-end annual core inflation to 4.0% in the fourth quarter, up from its previous estimate of 3.7%.
Published on 2025-09-26

Banxico Lowers Interest Rate to 7.75%, as Expected
The Bank of Mexico lowered its key rate by 25 bps to 7.75% in its August meeting, as annual inflation declined from 4.51% in mid-June to 3.51% in July and the domestic economy expanded at a slightly faster pace in Q2 than in Q1, though slack persists. The release indicated that the Board deemed appropriate a continued cycle of rate cuts, taking into account the degree of monetary restriction implemented and anticipating that the ongoing disinflation process will allow further easing while preserving a restrictive stance. However, the central bank remains cautious amid elevated global uncertainty, from trade tensions to geopolitical conflicts, that could reignite inflation via peso depreciation or deepen the economic slowdown. While progress toward the 3% inflation target remains on track, with forecasts unchanged and still pointing to convergence by the third quarter of 2026, members underscored the importance of a flexible policy framework.
Published on 2025-08-07

Banxico Cuts Interest Rate to 8%, as Expected
The Bank of Mexico lowered its key rate by 50 bps to 8.00% on June 26th, as annual inflation increased to 4.51% by mid-June and the domestic economy expanded moderately in April, though slack persists. The release indicated that the Board could continue calibrating similar 50 bps cuts, anticipating that the disinflation process will allow a further easing cycle while maintaining a restrictive stance. However, the central bank remains cautious amid elevated global uncertainty—ranging from trade tensions to geopolitical conflicts—that could reignite inflation via peso depreciation or deepen the economic slowdown. While progress toward the 3% inflation target is on track, with forecasts pointing to convergence by the third quarter of 2026, members underscored the importance of a flexible policy framework to manage inflation expectations and preserve financial stability, particularly given the peso’s recent appreciation.
Published on 2025-06-26

Banxico Lowers Interest Rate by 50bps, as Expected
The Bank of Mexico lowered its key rate by 50 bps to 8.50% on May 15th, as annual inflation eased to 3.93% in April and the domestic economy registered a modest 0.2% quarter-on-quarter expansion after earlier weakness. The release indicated that the Board could continue calibrating similar 50 bps cuts, anticipating that the disinflation process will allow a further easing cycle while maintaining a restrictive stance. However, the central bank remains cautious amid elevated global uncertainty—ranging from US trade tensions to geopolitical conflicts—that could either reignite inflation via peso depreciation or deepen the economic slowdown. While progress towards the 3% inflation target is on track, with forecasts pointing to convergence by the third quarter of 2026, members underscored the importance of a flexible policy framework to manage inflation expectations and preserve financial stability, particularly given the peso’s recent appreciation.
Published on 2025-05-15

Banxico Cuts Rate to 9.0%, Signals Further Easing
Banxico, as the Mexican central bank is known, lowered its key rate by half a percentage point to 9.00% in a decision announced on March 27, as inflation eased further and amid signs of continued economic weakness early this year. The release revealed that several board members now foresee a similar 50bps reduction at the May 9 meeting if disinflation persists, signaling a potential continuation of the easing cycle. However, the central bank remains cautious amid significant global uncertainties, notably escalating trade tensions and broader geopolitical risks that could either fuel inflation through currency depreciation or dampen growth due to increased economic slack. While progress towards the 3% inflation target has been notable, members stressed the importance of a flexible policy framework, one that allows for gradual adjustments in a "new stage" of monetary policy without jeopardizing financial stability, particularly given the current rate differential with the US Fed.
Published on 2025-03-27

Banxico Minutes Signal Cautious Easing Amid Global Uncertainty
Banxico, as the Mexican central bank is known, lowered its key rate by half a percentage point to 9.50% in a decision announced on February 6, as inflation cooled and after the economy contracted slightly late last year. The minutes revealed that several board members now foresee a similar 50bps reduction at the March 27 meeting if disinflation continues, signaling a potential acceleration of the easing cycle. However, the central bank remains cautious amid significant global uncertainties, notably potential U.S. tariff threats and broader geopolitical risks that could either fuel inflation through currency depreciation or dampen growth due to increased economic slack. While progress towards the 3% inflation target has been notable, members stressed the importance of a flexible policy framework, one that allows for swift adjustments in a "new stage" of monetary policy without jeopardizing financial stability, particularly given the current rate differential with the Federal Reserve.
Published on 2025-02-20

Banxico Cuts Rates by 50bps to 9.50%, Signals Further Easing
The Bank of Mexico cut its benchmark interest rate by 50bps to 9.50% in February, in a majority decision. This aligns with the global disinflation trend, though inflation remains persistent in major economies, particularly in services. Domestically, economic activity contracted in Q4 2024 and is expected to weaken in 2025, with employment slowing and downside risks persisting. Headline inflation fell to 3.69% in mid-January 2025, while core inflation stood at 3.72%. While core inflation continues to trend downward, persistent services inflation led Banxico to maintain its inflation forecasts, expecting headline inflation to converge to the 3% target by Q3 2026. The bank indicated that further rate cuts may be appropriate, depending on the pace of disinflation and economic outlook.
Published on 2025-02-06

Banxico Cuts Rates to 10%, Signals Further Easing
The Bank of Mexico unanimously cut its benchmark rate by 25bps to 10% in December 2024, continuing its easing cycle as expected. This aligns with global disinflation trends, though inflation in major economies remains persistent, particularly in services. Domestically, economic activity rebounded in Q3 following prior weakness but is expected to soften into 2025, with employment decelerating and downside risks persisting. Inflation eased, with headline inflation falling to 4.55% in November from 4.76% in October, and core inflation declining from 3.80% to 3.58%. While core inflation reflects an ongoing downward trend, persistent inflation in services led Banxico to revise inflation forecasts slightly upward, with headline inflation now expected to converge to the 3% target by Q3 2026. The bank signaled further rate cuts may be appropriate, potentially of greater magnitude, depending on the disinflation pace and economic outlook.
Published on 2024-12-19

Banxico Cuts Interest Rate to 10.25%, as Expected
The Bank of Mexico lowered its benchmark interest rate to 10.25% in November 2024, as widely anticipated and aligning with trends in major economies. Global economic growth in Q3 is expected to mirror the previous quarter, though unevenly across countries, while inflation in advanced economies continues to decline, with some nearing central bank targets. In Mexico, financial markets saw volatility, with a depreciated peso and rising government bond yields, as economic activity showed slight improvement but is expected to soften next year. Headline inflation rose from 4.66% in mid-September to 4.76% in October due to supply shocks affecting non-core inflation, while core inflation eased to 3.8%. Despite the recent inflationary pressures, long-term inflation expectations remain stable, and the central bank eased monetary policy, noting improved core inflation trends but maintaining caution due to risks of sticky core inflation and potential currency depreciation.
Published on 2024-11-14

Banxico Lowers Interest Rate to 10.5%, as Expected
The Bank of Mexico lowered its benchmark interest rate to 10.50% in September 2024, aligning with trends in major economies. Global economic growth in Q3 is expected to mirror the previous quarter, though unevenly across countries, while inflation in advanced economies is approaching central bank targets. In Mexico, financial markets have experienced volatility, marked by fluctuations in the peso and declining government bond yields, while economic activity remains weak and employment growth slows. Headline inflation fell from 5.57% in July to 4.66% in mid-September, driven by a reversal in non-core inflation shocks, with core inflation easing to 3.95%. Despite these improvements, inflation expectations for the end of 2024 have risen for headline inflation, though core inflation expectations have moderated. The central bank eased monetary policy, acknowledging improved inflation trends but remaining cautious due to risks from sticky core inflation and potential currency depreciation.
Published on 2024-09-26

Banxico Surprises with Rate Cut
The Bank of Mexico reduced its benchmark interest rate to 10.75% in August 2024, defying market expectations amid ongoing economic challenges. Global economic activity is anticipated to expand at a slower pace, while inflation in advanced economies generally declines. In Mexico, significant market volatility occurred due to a depreciating peso and rising government bond yields. Economic performance has remained weak, continuing trends from late last year. Meanwhile, annual headline inflation increased from 5.10% in June to 5.57% in July, mainly driven by non-core inflation, while core inflation fell from 4.05% to 4.00%. Core components easing, coupled with the need to stimulate the economy led to the monetary authority to reduce borrowing costs. The central bank reaffirmed its commitment to achieving a low and stable inflation rate, adopting a cautious monetary policy approach aimed at reaching the 3% target by 2025.
Published on 2024-08-08

Banxico Holds Interest Rate at 11.00% in June
The Bank of Mexico maintained its benchmark interest rate at 11.00% in June 2024, aligning with expectations and marking the second consecutive hold. Globally, economic activity is expected to continue expanding in Q2 2024 at a slower pace, while inflation in advanced economies is generally declining. In Mexico, markets saw significant volatility, with rising government bond yields and a depreciating peso. Economic activity remained weak, continuing a trend from late last year. Annual headline inflation rose from 4.65% to 4.78% between April and mid-June, driven by non-core inflation, while core inflation fell from 4.37% to 4.17%. Inflation expectations for the end of 2024 increased, while core expectations slightly decreased. The disinflation process is expected to continue, with inflation converging to the target in Q4 2025. The central bank reaffirms its commitment to achieving low and stable inflation, maintaining a restrictive stance to guide inflation towards the 3% target.
Published on 2024-06-27

Banxico Keeps Rate Unchanged at 11%, Meeting Expectations
The Bank of Mexico maintained its benchmark interest rate at 11.00% during its May 2024 meeting, aligning with expectations following the first rate cut in the previous session after seven consecutive pauses. Globally, economic activity expanded, but inflation rates varied, leading to market volatility, with significant global risks identified as geopolitical tensions and prolonged inflationary pressures. In Mexico, government bond yields rose, and the peso experienced fluctuations, while economic weakness persisted in early 2024, and the labor market remained resilient. Meanwhile, annual inflation increased, while core inflation continued to decline. Forecasts suggested a prolonged inflationary period, with risks including persistent core inflation, currency depreciation, and geopolitical conflicts. Looking ahead, the Board will closely monitor inflationary pressures, considering adjustments to the reference rate as necessary to ensure sustained inflation convergence.
Published on 2024-05-09