At its November 2026 meeting, Banxico cut its benchmark interest rate by 25 basis points to 6.25%, contrary to market expectations of no change. The Governing Board reported that the disinflation process continued and assessed that, given the prevailing slack in the economy, recent exchange rate movements would have only a limited pass-through to consumer prices. It also underscored the absence of demand-driven inflationary pressures and emphasized that the already-implemented monetary tightening remained in effect.
Looking ahead, the Board signaled that keeping the policy rate at its new level for an extended period would support the convergence of inflation toward its target and help Mexico navigate external macroeconomic challenges. At the same time, Banxico revised its headline inflation forecast upward for Q4 2026 and adjusted its core inflation projection slightly higher. Nevertheless, headline inflation is still expected to converge to the 3% target by Q4 2027.
