Mexico Breaks Debt Rule as Banxico Cuts Rates: Finance Week

This week in finance news: Mexico continues to struggle to meet its debt investment rule, while expectations build for a Federal Reserve rate cut in September and Banxico opts to slow its monetary easing pace. The roundup also examines stablecoin trends in Mexico, a sharp decline in M&A volume despite higher deal values, and the latest shifts in both global and local economic policy.

More news below:

Mexico Skirts Golden Rule, Invests 70 Cents per Peso in 1H25

Mexico’s federal government has once again failed to comply with the so-called “golden rule of debt,” which requires physical investment to exceed borrowing, according to a report by policy group México Evalúa. In 1H25, just 70 cents were invested in infrastructure for every peso of debt incurred.

Markets Expect Almost 100% Chance of September Fed Cut

The likelihood of a Federal Reserve interest rate cut in September is now nearly 100% after data showed US inflation rose at a moderate pace in July and Treasury Secretary Scott Bessent indicated that a half-point reduction could be possible amid weak employment numbers.

Stablecoins Account for 36% of Mexico’s Crypto Buys in 1H25

Stablecoins accounted for 36% of cryptocurrency purchases in Mexico during the first half of 2025, below the Latin American average of 46%, according to Bitso’s “Crypto Landscape in Latin America” report. This contrasts with Argentina, where dollar-backed stablecoins represented 85% of purchases, driven by economic instability and demand for digital dollars. 

Mexico’s M&A Volume Drops 36%, Value Rises 46% in 2025

Mexico recorded 149 mergers and acquisitions in the first seven months of 2025, totaling US$14.58 billion, according to TTR Data. This represents a 36% drop in transaction volume but a 46% increase in value compared to the same period in 2024.

Banxico Cuts Rate to 7.75% as Easing Pace Slows

Banxico cut its benchmark interest rate by 25 basis points to 7.75%, slowing its monetary easing cycle and signaling caution amid persistent inflation risks and weak economic activity. The decision, approved by a 4–1 vote, saw Deputy Governor Jonathan Heath favor holding the rate at 8%, while Governor Victoria Rodríguez Ceja and Deputy Governors Galia Borja, José Gabriel Cuadra García, and Omar Mejía Castelazo backed the cut.