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LatinNews Daily - 06 February 2026
In brief: Mexico’s Banxico pauses rate cutting cycle
*Mexico’s central bank (Banxico) has decided to maintain its benchmark interest rate at 7.0%, following over one-and-a-half years of consecutive rate cuts, most recently a 25-basis point cut in December. The bank’s governing board announced the pause in its rate-cutting cycle, which began in August 2024, citing rising inflation and persistent trade tensions. Banxico noted that forecasts for headline and core inflation had been adjusted upwards for this year and next, saying this “is mainly the result of a higher anticipated trajectory for core inflation”. Both the headline and core inflation rates are now expected to converge to the 3.0% target by the second quarter of 2027, rather than the third quarter of 2026 as forecast in December. The Banxico board stated that it would be “taking into account the effects of all determinants of inflation” and reaffirmed its “commitment to its primary mandate and the need to persevere in its efforts to consolidate a low and stable inflationary environment”.
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