Banxico keeps interest rates unchanged at 6.50% as expected
The Bank of Mexico, also known as Banxico, held rates unchanged at 6.50% for the third consecutive meeting, unanimously as expected by most analysts, after ending its easing cycle in May.
The Bank of Mexico, commonly referred to as Banxico, maintained interest rates at 6.50% for the third consecutive meeting, as anticipated by most analysts. This decision came after the bank concluded its easing cycle in May. In their monetary policy statement, the Governing Board expressed that the risk balance concerning inflation leans towards the higher end, and stated, "Looking ahead, the Governing Board estimates that it will be appropriate to maintain the reference rate at its current level."
Banxico anticipates inflation to align with its 3% target, varying by plus or minus 1%, in the final quarter of 2027. For 2026, the bank forecasts headline and core inflation at 3.5%. In terms of economic activity, Banxico projected that "Economic slack is expected to persist throughout the forecast horizon, and significant downward risks to economic activity persist."
All eight central bank meetings occur annually, with its monetary policy greatly influenced by the decisions of the US Federal Reserve (Fed). Consequently, Banxico's decision-making committee typically convenes a week after the Federal Reserve, allowing the bank to react and sometimes anticipate policies set by the Fed.
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