On Thursday, the Banco de México (Banxico) reduced its benchmark interest rate by 50 basis points, lowering it from 9.50% to 9%. The central bank also indicated the possibility of further adjustments to its monetary policy, depending on economic conditions.
In its official statement, Banxico emphasized that the disinflation process is progressing, opening the door for continued monetary easing in the coming months. The board forecasted that inflation would reach its 3% target by the fourth quarter of 2026.
Key Highlights from Banxico’s Statement
The board expressed its willingness to further adjust the monetary policy stance if needed, potentially in similar increments.
While inflation is expected to decline, the risks for future inflation remain tilted to the upside.
The central bank believes that the inflationary environment will allow for continued rate cuts, though it will maintain a restrictive overall stance.
Economic policy shifts under the new US administration have added uncertainty to Banxico’s forecasts, potentially leading to inflationary pressures.
The disinflation process is on track, but trade tensions and broader economic uncertainties pose significant risks to future economic stability.
Banxico’s latest decision and outlook signal ongoing caution in managing Mexico’s monetary policy amid global uncertainties and domestic inflationary pressures.
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