MNI BRIEF: Banxico Cuts Rate By 25BP To 7.00%, Hints At Hold

The Central Bank of Mexico on Thursday cut its overnight interbank interest rate by 25 basis points to 7.00%, as expected, with Deputy Governor Jonathan Heath again dissenting in favor of holding steady.

The board did not signal a cut at the next meeting as it had done in previous meetings, and instead said it will "evaluate the timing for additional reference rate adjustments." In the last decision in November, Banxico had said it would "evaluate reducing the reference rate."

Banxico still projects headline inflation will converge to the 3% target by the third quarter of 2026.

“Actions will be implemented in such a way that the reference rate remains consistent at all times with the trajectory needed to enable an orderly and sustained convergence of headline inflation to the 3% target during the forecast period,” the board said. (See MNI BANXICO WATCH: Another 25BP Cut To 7% Likely, Split Again)