The Bank of Mexico (Banxico) has decided to maintain the benchmark interest rate at 6.50%, despite a promising decrease in inflation. This choice, announced during the bank’s recent monetary policy meeting, will impact the daily finances of citizens, particularly those who rely on credit and loans, as the costs remain steady for now.
At this meeting, all board members unanimously supported keeping the overnight interbank interest rate unchanged. Banxico had previously hinted at this decision after lowering rates in early May, marking this move as part of a cautious approach to manage the economy.
Recent data from the National Institute of Statistics and Geography (INEGI) revealed that Mexico’s annual inflation rate dropped to 3.55% in the first half of June, down from 3.94% in May. While Banxico aims for a target inflation rate of 3%, it operates within a tolerance range of 2% to 4%, making this decline noteworthy.
Banxico noted that both core and non-core components contributed to this decrease. Core inflation fell from 4.26% to 4.12%. The bank anticipates continued progress in lowering this rate throughout the second half of the year, although it slightly adjusted its forecast upward for core inflation for the upcoming quarter.
The central bank also outlined projections for headline inflation, estimating it to be at 3.8% for the third quarter and gradually decreasing to 3% by mid-2027. However, Banxico acknowledged potential risks that could disrupt these expectations, such as foreign trade issues and environmental factors.
In deriving its decision, Banxico considered various economic indicators, including the performance of the Mexican peso and the overall demand within the economy. The board believes this approach will counterbalance challenges arising from both domestic and international economic conditions, aiming to provide a stable financial climate for all citizens.