Mexico central bank cuts rates but signals caution ahead
Banxico lowered the Benchmark interest rate to 6.5% from 6.75% as expected.
- Board members Heath and Borja voted to hold rates steady.
- Board members Rodriguez, Mejia, and Cuadra voted to cut rates.
- The board was not unanimous on the rate decision.
- Benchmark interest rate lowered to 6.50% from 6.75%.
- Headline inflation is projected to converge to target in Q2 2027.
- Looking ahead, the board estimates it will be appropriate to maintain the rate at its current level.
- Forecasts Q4 2026 average annual headline inflation at 3.5% versus previous forecast of 3.5%.
- Forecasts Q4 2027 average annual core inflation at 3.0% versus previous forecast of 3.0%.
- Forecasts Q4 2026 average annual core inflation at 3.4% versus previous forecast of 3.4%.
- Forecasts Q4 2027 average annual headline inflation at 3.0% versus previous forecast of 3.0%.
This article was written by Greg Michalowski at investinglive.com.