MNI BRIEF: Banxico Cuts Rate By 25BP, Heath Dissents Again

The Central Bank of Mexico decided Thursday to cut its overnight interbank interest rate by 25 basis points to 7.50% as expected, marking the second consecutive reduction of this size, with Deputy Governor Jonathan Heath again dissenting in favor of holding steady.

The board signaled more cuts ahead without specifying the size of future moves.

“Looking ahead, the Board will assess further adjustments to the reference rate. It will take into account the effects of all determinants of inflation,” the English version of the statement said. 

Banxico still projects headline inflation will converge to the 3% target by the third quarter of 2026. “Although the balance of risks for the trajectory of inflation within the forecast horizon remains biased to the upside, said bias is less pronounced than that faced between 2021 and 2024.” (See MNI BANXICO WATCH: 25BP Cut Expected, Eyes on Forward Guidance)