Bank of Mexico holds interest rate, drops signal of prolonged pause
TLT•The Bank of Mexico held its benchmark interest rate at 6.50% in a unanimous decision, but removed guidance that had suggested rates would stay at that level. It maintained its forecast for inflation to reach its 3% target in the fourth quarter of 2027.
1. Rate decision
The Bank of Mexico held its benchmark interest rate at 6.50%, as expected, in a unanimous decision by its five-member board. Its statement said future policy decisions would consider the disinflation process and its determinants, including exchange-rate pass-through, economic slack and inflation expectations.
2. Guidance and outlook
The statement omitted language from the previous three statements estimating that it would be appropriate to maintain the key rate at current levels. The bank kept its forecast for headline inflation to converge to its 3% target in the fourth quarter of 2027 and said inflation risks remain tilted to the upside. It cited uncertainty from U.S. economic policy and geopolitical conflicts, while saying economic slack is expected to continue and downside risks to activity persist.
