LatinNews Daily - 16 May 2025

*Mexico’s central bank (Banxico) has lowered its benchmark interest rate by 50 basis points for the third time this year, bringing the rate to 8.5%. This is the seventh consecutive rate cut, following cuts of 25 basis points in December, November, September, and August last year. In a statement announcing the decision, Banxico said it could consider cutting the rate by a similar magnitude at future meetings. However, the bank noted that core inflation rose in April and forecasts for general inflation at the close of 2025 had been revised up in the short-term. As in its previous monetary policy meeting, Banxico cited currency depreciation, disruptions caused by geopolitical factors and trade policies, persistence of core inflation, cost pressures and the impact of climate change as key risks affecting inflation. Despite these risks, Banxico still expects inflation to reach the 3% target by the third quarter of 2026.

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