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Banxico Cuts Rate to 7.25% as Argentina’s Bonds Rally and Risk Gauge Nears Year Lows

The move underscores a gradual easing path supported by softer Mexican inflation.

Overview

  • Mexico’s central bank delivered a widely expected 25 basis‑point cut in a 4–1 vote, marking a twelfth consecutive reduction since early 2024.
  • The peso firmed slightly to about 18.56 per dollar as the dollar index slipped and October inflation in Mexico eased to 3.57% headline with core at 4.28%.
  • Banxico said it will assess further reductions, and analysts cited the statement in projecting a potential additional 25 bp cut in December.
  • Argentina’s Treasury rolled over 111% of maturities in its latest auction with lower rates and longer terms under new finance chief Alejandro Lew.
  • Argentine sovereign bonds extended gains with JP Morgan’s risk index around 621 bps; FX activity was light during the banking holiday, with the official near 1,475 pesos and the blue near 1,435, as investors watch for steps to rebuild reserves.