LatinNews Daily - 07 August 2026

*Mexico’s central bank (Banxico) has announced it is holding its benchmark interest rate at 6.50% for a second consecutive time. In a statement, Banxico said that since the last monetary policy meeting in June, international financial markets had “shown volatility, and commodity prices rose across the board amid the renewed escalation of the conflict in the Middle East”. In Mexico, it noted that economic activity had rebounded in the second quarter following a contraction in Q1 but that “loose conditions are still expected throughout the forecast horizon, and significant downside risks to economic activity persist”. It added that inflation slowed from 3.55% to 3.10% between the first half of June and July, as both headline and core inflation decreased. Inflation forecasts for the end of the year were also revised down. Banxico expects inflation to converge to the target of 3% by the end of 2027. “Looking ahead, the governing board considers it appropriate to maintain the benchmark rate at its current level,” stated Banxico, indicating that no further rate cuts or increases are expected soon.

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