LatinNews Daily - 27 March 2026

*Mexico’s central bank (Banxico) has lowered its benchmark interest rate by 25 basis points, bringing the rate to 6.75%. This is the first cut following a pause in the rate-cutting cycle in February, which had been preceded by one-and-a-half years of consecutive cuts. The decision split Banxico’s board, with three votes in favour and two against. This comes amid rising inflation expectations, uncertainty over US economic policy, and geopolitical conflicts. Banxico’s decision contradicts last week’s decision of the US Federal Reserve to leave interest rates unchanged due to uncertainties surrounding the war in the Middle East. Banxico noted that headline inflation in Mexico increased from 3.77% to 4.63% from the first two weeks in January to the first half of March, while core inflation “remained practically unchanged”, passing from 4.47% to 4.46%. The bank adjusted its headline inflation forecasts upward, now expecting inflation to reach 4.1% in the first quarter of 2026, up from 4.0% in its February meeting, while maintaining its end-2026 forecast at 3.5%. Core inflation was also projected to increase to 4.5% in the first quarter of 2026, up from 4.4%, while the forecast for Q4 2026 remained unchanged at 3.4%. The governing board said it would be “taking into account the effects of all determinants of inflation” and reaffirmed its commitment to achieving the convergence of headline inflation to 3.0% by the second quarter of 2027.

End of preview - This article contains approximately 242 words.

Subscribers: Log in now to read the full article

Not a Subscriber?

Choose from one of the following options

• Subscribe
• Sign up for a one-time, 14-day trial