MNI BRIEF: Banxico Unanimously Cuts 25BP To 10.25%
MNI (BRASILIA) - The Central Bank of Mexico reduced its overnight interbank interest rate Thursday by 25 basis points to 10.25%, the third straight reduction and the first unanimous decision since May.
"The Board expects that the inflationary environment will allow further reference rate adjustments. It will consider the prospects of global shocks continuing to fade and the effects of the weakness in economic activity," the bank said in a statement. Banxico expects headline inflation to converge to the 3% target in the fourth quarter of 2025.
In September, Banxico also lowered its interest rate by 25 basis points, to 10.50%, with Deputy Governor Jonathan Heath dissenting in favor of holding borrowing costs unchanged.
"The balance of risks for the trajectory of inflation within the forecast horizon remains biased to the upside. Nevertheless, the inflation outlook has been improving after the significant shocks caused by the pandemic and the war in Ukraine. The behavior of core inflation reflects this improvement," Banxico said. (See MNI POLICY: Mexico FX Intervention Only Amid Market Disorder)