MNI BRIEF: Banxico Unanimously Cuts 25bps, Signals More
MNI (BRASILIA) - The Central Bank of Mexico unanimously reduced its overnight interbank interest rate by 25 basis points to 10.00% Thursday, marking the fourth consecutive cut, and signaled further reductions next year, potentially including larger ones.
"Looking ahead, the Board expects that the inflationary environment will allow for further reference rate reductions. In view of the progress on disinflation, larger downward adjustments could be considered in some meetings, while maintaining a restrictive stance," the bank said in a statement.
Banxico now expects headline inflation to converge to the 3% target by the third quarter of 2026, compared to the fourth quarter of 2025 in its previous forecast.
"Annual headline inflation decreased from 4.76% to 4.55% between October and November. It is still being affected by supply shocks that have impacted the non-core component. Core inflation, which better reflects inflation’s trend, continued its clear downward trajectory, declining from 3.80% to 3.58% in the same period," the statement added. (See MNI INTERVIEW: Banxico To Cut 25BP Despite Inflation Risks)