The Bank of Mexico (Banxico) reported Thursday that it reduced its key interest rate in 25 basic points (PB), as expected by the market, to take it to 7.5% and said forward will value additional cuts.
The Bank of Mexico has decreased the referential rate by 375 bp since the beginning of 2024 as part of a cycle of readjustments after having taken it to its maximum historical level of 11.25%, in the midst of an economy that has shown atony.
“The Governing Board judged appropriate to continue with the reference rate decreases cycle. This is consistent with the valuation of the current inflationary scenario,” said the Central Bank.
In particular, he considered the behavior of the exchange rate, the weakness shown by economic activity and the possible impacts of changes in commercial policies globally, ”said Banxico in his monetary policy statement.
The cut was in line with a reuters survey released last week and its announcement was given a day after knowing that general inflation accelerated in the first half of September, although less than expected, when it was located at 3.74%. The underlying index continued above the goal of the monetary authority when reaching 4.26%.
The monetary authority kept prognosis that inflation will reach 3% in the third quarter of 2026. For general inflation it fell its 3.6% expectation from a previous 3.7% for the fourth quarter of 2025 and increased that of the underlying to 4% from a previous 3.7%.
He warned that the risk balance regarding the trajectory planned for inflation on the forecast horizon maintains a rising bias, but less pronounced than between 2021 and 2024.
“Changes of economic policy by the new US administration have added uncertainty to forecasts. Its effects could imply pressure on inflation on both sides of the balance,” he added.
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