Updated
Updated · Mexico Business News · Jun 29
Banxico Holds Rate at 6.50% as Core Inflation Risks Delay Further Easing
Updated
Updated · Mexico Business News · Jun 29

Banxico Holds Rate at 6.50% as Core Inflation Risks Delay Further Easing

2 articles · Updated · Mexico Business News · Jun 29

Summary

  • Banxico’s Governing Board unanimously kept the benchmark rate at 6.50%, signaling policy will likely stay restrictive through the rest of 2026 after May’s final 25-basis-point cut.
  • 3.55% headline inflation in mid-June gave policymakers room to pause, but core inflation only eased to 4.12%, prompting the bank to raise its 2026 core forecast to 3.5% and keep an upside risk bias.
  • Recent Iran-US conflict and still-uncertain ceasefire fed energy-price pressure, market volatility and a stronger dollar, reinforcing Banxico’s decision to align with the Federal Reserve’s unchanged stance.
  • Mexico’s economy is expected to return to growth in 2Q26 after a 0.8% first-quarter contraction, but Banxico said slack will persist and downside risks to activity remain significant.
  • The hold extends tighter financing conditions for borrowers and investors, while officials argue preserving price stability and inflation expectations outweighs calls for more support to growth.

Insights

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