MNI BRIEF:Banxico Cuts 25BP On 4-1 Vote, Heath Voted For Hold
MNI (BRASILIA) - The Central Bank of Mexico reduced its overnight interbank interest rate Thursday by 25 basis points to 10.50% for the second straight meeting, with Deputy Governor Jonathan Heath dissenting in favor of holding borrowing costs unchanged.
"Looking ahead, the board expects that the inflationary environment will allow further reference rate adjustments," the bank said in a statement. Banxico expects the headline inflation to converge to the 3% target in the fourth quarter of 2025.
Last month, Banxico also lowered its interest rate by 25 basis points, to 10.75%, in a split decision. Arguments for further cuts center on the continued decline in core inflation. (See MNI WATCH: Banxico To Cut Rates By 25BP As Inflation Eases)
"Expectations for headline inflation for the end of 2024 were revised upwards. In contrast, those for core
inflation decreased. Those for longer terms remained relatively stable at levels above target," Banxico said.