The Bank of Mexico cut its benchmark interest rate by 25 basis points to 6.75% at its March 26, 2026 meeting, unexpectedly resuming its easing cycle. The move follows a brief pause in February, after the sequence of rate cuts that began in March of the previous year.
Economic activity in Mexico showed clear weakness at the start of 2026, following an expansion in the prior quarter. The Board highlighted that downside risks stemming from trade tensions and global uncertainty continue to weigh on the economic outlook.
The decision to reduce the rate was approved by a majority of the Board, which deemed the cut appropriate in light of the current inflation environment, the softness in economic activity, and the already restrictive stance of monetary policy.
Headline inflation rose to 4.63% in mid-March, up from 3.77% in January, while core inflation was essentially stable at 4.46%, remaining above 4%. Despite these short-term pressures, Banxico continues to project that inflation will converge to its 3% target by the second quarter of 2027.
