Mexico’s central bank lowered its overnight rate by 25 basis points in a split vote, then signalled an extended period at the new level. The decision takes effect on 6 November. It comes as headline inflation increased and the bank raised its final-quarter inflation forecasts while keeping its 3 per cent target convergence date unchanged.
Banco de México, Mexico’s central bank, lowered its overnight interbank interest-rate target by 25 basis points to 6.25 per cent on 5 November. The previous rate was 6.50 per cent, and the new level takes effect on 6 November. The board had three members who supported the reduction and two preferred an unchanged rate. After the adjustment, the board envisaged maintaining the rate at this level for an extended period.[1], [2]
Annual headline inflation rose from 3.42 per cent in the first half of September to 3.62 per cent in the first half of October. Core inflation edged lower, from 3.79 per cent to 3.78 per cent. The bank raised its final-quarter average headline forecast from 3.5 per cent to 3.7 per cent and its core forecast from 3.6 per cent to 3.7 per cent.[1]
The board considered that spare capacity persisted and demand pressures were absent despite third-quarter economic expansion. It judged monetary policy still restrictive and its effects on prices still active. The forecast continued to put convergence to the 3 per cent inflation target in the final quarter of 2027. Among the upside risks the bank identified were currency depreciation, persistent core-price pressures, trade developments, geopolitical events and weather.[1]
