Business · Economy · 23 mins ago
Mexico’s central bank cuts key interest rate to 6.25%
Mexico’s central bank cut its key rate to 6.25% on November 5, lowering it by 0.25 percentage points.
The decision followed a pause at 6.5% and was backed by three of the bank’s five board members, while two wanted no change.
The bank said inflation was slowing and demand was not adding to price pressures, but it raised its forecast for inflation in late 2026 from 3.5% to 3.7%.
It expects inflation to reach its 3% target in late 2027.
The cut may add pressure to the peso, which was already near a one-year low, and the bank named a weaker currency among the risks to its inflation outlook.
The gap between Mexican and US interest rates also narrowed after the move.
The bank says it expects to hold the rate at this level for a time, as it works to bring inflation toward its target.
Mexico’s central bank cut its policy rate by 0.25 percentage points to 6.25% on November 5, against most market expectations.
Three of the five members of its governing board supported the cut, while two favored keeping the rate at 6.5%.
The bank said inflation was slowing and economic demand was not adding to price pressures.
It raised its forecast for overall inflation in the fourth quarter of 2026 from 3.5% to 3.7%.
The bank expects inflation to return to its 3% target in the fourth quarter of 2027.
- Who
- Mexico’s central bank, Banco de México, and its five-member governing board.
- What
- The bank cut its policy rate by 0.25 percentage points to 6.25%.
- When
- The decision was made on November 5, 2026, and takes effect November 6.
- Where
- Mexico.
- Why
- The bank cited slowing inflation and said economic demand was not adding to price pressures. Nikkei also reported that the bank appeared to prioritize supporting the domestic economy.
Supporters of the rate cut
Supporters of keeping the rate at 6.5%
Vote
Supporters of the rate cut
Governor Victoria Rodríguez Ceja and deputy governors José Gabriel Cuadra García and Omar Mejía Castelazo voted for the 0.25-point cut.
Supporters of keeping the rate at 6.5%
Galia Borja Gómez and Jonathan Heath voted to keep the rate at 6.5%.
Banco de México kept its policy rate at 6.5%.
The governing board voted three to two to cut the rate by 0.25 percentage points to 6.25%.
The rate cut was due to take effect.
The central bank expects inflation to return to its 3% target.
- Policy rate after cut
- 6.25%
- Size of rate cut
- 0.25 percentage points
- Governing board vote
- 3 for the cut; 2 for keeping the rate at 6.5%
- Fourth-quarter 2026 inflation forecast
- Raised from 3.5% to 3.7%
- Inflation target timing
- Fourth quarter of 2027
8 sources
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What people are saying
Keeping the rate for a prolonged time at the level reached will support the convergence of inflation to its target and will be appropriate to face external macroeconomic challenges.
Posts on X
Con la presencia de todos sus miembros, la Junta de Gobierno del #BancodeMéxico decidió por mayoría disminuir la Tasa de Interés Interbancaria a 1 día a un nivel de 6.25% con efectos a partir del 6 de noviembre del 2026. Consulta el comunicado en: https://t.co/v3aqzLKKrQ