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.