Banxico interest rate cut to 6.25%, Digi Mart USA News (Mexico City): Defying the expectations of most financial analysts and market participants, the Bank of Mexico (Banxico) announced a 25-basis-point cut to its benchmark rate, bringing it to 6.25%. The move marks its lowest level since February 2022 and comes after three consecutive decisions to hold the rate unchanged.
The monetary policy decision was not free of debate within the Governing Board. The cut was approved by majority vote, with governor Victoria Rodríguez Ceja and deputy governors José Gabriel Cuadra García and Omar Mejía Castelazo voting in favor.
Galia Borja Gómez and Jonathan Heath voted to keep the rate at 6.5%.
The central bank justified the move by judging that the disinflation process has continued and that no demand pressures are perceived in the national economy, which maintained moderate expansion during the third quarter.
The decision follows an rise in headline inflation, which climbed from 3.42% to 3.62% between September and the first half of October. The increase was driven mainly by higher non-core inflation and temporary price increases for certain foods.
In response, Banxico slightly adjusted its forecast for the fourth quarter of 2026 to 3.7%, while reaffirming that convergence toward its 3% target remains firm for the fourth quarter of 2027.
The decision also comes amid a global backdrop. Last week, the U.S.
Federal Reserve and the European Central Bank both opted to pause their rates. The Banxico cut narrows the interest rate differential between Mexico and the United States to a new historic low of 225 basis points, a factor markets are watching closely for its possible impact on volatility and the Mexican peso against the dollar.
Looking ahead, the Bank of Mexico’s Governing Board said that keeping the rate at this level for an extended period will help consolidate price stability and address external macroeconomic risks.
The Board decided by majority to lower the one-day interbank interest rate to 6.25%, effective November 6, 2026.
