MNI BRIEF: Banxico Slows Pace With 25BP Cut, Heath Dissents

The Central Bank of Mexico decided to slow the pace of its easing cycle Thursday, reducing its overnight interbank interest rate by 25 basis points to 7.75%. Deputy Governor Jonathan Heath dissented in favor of holding the rate at 8.00%.

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,” the English version of the statement said. The decision was in line with market expectations.

Banxico still expects headline inflation to 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 WATCH: Banxico To Decelerate Rate Cuts Pace To 25BP)