Banxico Unexpectedly Cuts Rates

2026-03-26 19:07 By Felipe Alarcon 1 min. read

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.



News Stream
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.
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