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46m ago

Banxico Cuts Rate to 7.25%, Says Policy Has Entered Neutral Territory

Markets expect another quarter-point cut in December contingent on inflation and currency data.

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El Banco de Inglaterra en Londres el 1 de agosto del 2024. (AP foto/Alberto Pezzali)
El banco central redujo en 25 puntos base la tasa de interés, mientras la inflación baja pero se mantiene la incertidumbre económica.

Overview

  • Mexico’s central bank reduced the policy rate by 25 basis points to 7.25% and characterized its stance as neutral after a prolonged easing cycle.
  • The decision passed by majority, with Deputy Governor Jonathan Heath dissenting in favor of holding at 7.50%.
  • Banxico said further moves will be data‑dependent, citing exchange‑rate behavior, weak domestic activity and potential shocks from global trade policy.
  • Analyst surveys had overwhelmingly forecast today’s 25 bp reduction, and consensus now points to a year‑end rate near 7.00% if a December cut materializes.
  • The bank projects inflation will converge to its 3% target in the second half of 2026 after minor near‑term forecast tweaks, with risks including peso depreciation, persistent core pressures and geopolitical or trade disruptions.