Banxico Cuts Benchmark Rate to 9%, Marks 7th Cut Since March

Mexico’s Central Bank (Banxico) lowered its benchmark interest rate by 50 basis points to 9%, marking its second consecutive cut of this size and the seventh reduction since the easing cycle began in March 2024.

The decision was unanimous among Banxico’s governing board, which indicated it “may consider adjusting [the rate] by a similar magnitude” in the future.

The move had been widely expected, as reflected in last week’s Banamex survey.

In its official statement, the board acknowledged potential inflationary pressures stemming from economic policy shifts under the new US administration. These pressures, it noted, could influence both upward and downward risks to inflation.

Despite the rate cut, Banxico maintained its quarterly inflation forecasts, projecting inflation at 3.7% for the first quarter of the year and anticipating its 3% target to be achieved by the second quarter of 2026.

However, the board highlighted that recent trade policy changes have added uncertainty to its inflation outlook.