LatinNews Daily - 30 May 2025

*Mexico’s central bank (Banxico) has said it expects to continue to adjust its interest rate by a similar magnitude, in the recently released minutes from its 15 May monetary policy meeting in which it lowered its benchmark interest rate by another 50 basis points to 8.5%. In the minutes, Banxico states it expects that the inflationary environment will allow the cycle of cuts to the reference rate to continue, while maintaining a restrictive stance. It says this will take into account “the effects of the weakness of economic activity”, which narrowly avoided a recession in the first quarter of 2025, as well as “the impact of the restrictive monetary stance that has been maintained”. The majority of the Banxico board stated they expected inflation, which stood at 3.93% in annual terms in April, to converge to the 3% target by the third quarter of 2026. Banxico noted the high levels of uncertainty resulting from trade policy announcements worldwide, in reference to the tariffs implemented by US President Donald Trump, highlighting the risks associated with a possible intensification of such uncertainty.

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