MNI BRIEF: Banxico Cuts Rate By 25BP To 7.25%, Heath Dissents

The Central Bank of Mexico decided Thursday to cut its overnight interbank interest rate by 25 basis points to 7.25% as expected, with Deputy Governor Jonathan Heath again dissenting in favor of holding steady. The board signaled at least one more cut ahead without specifying the size of it.

"Looking ahead, the Board will evaluate reducing the reference rate. It will take into account the effects of all determinants of inflation," the English version of the statement said. Officials had previously stated they would "assess further adjustments to the reference rate."

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. The changes in economic policy by the U.S. administration continue adding uncertainty to the forecasts. Their effects could imply inflationary pressures on both sides of the balance.” (See MNI BANXICO WATCH: Another 25BP Cut Expected, Focus On Guidance)