LatinNews Daily - 21 August 2026

*Mexico’s central bank (Banxico) has released the minutes from its monetary policy meeting on 6 August, in which its board voted to hold its benchmark interest rate at 6.50% for a second consecutive meeting. The governing board stated that external risks and a continued output gap justified caution even as inflation keeps falling and voted unanimously to hold the rate, minutes of the 6 August meeting showed. Board members noted that headline inflation fell to 3.10% in the first half of July from 3.55% in the first half of June, the lowest rate since 2020. However, core inflation, which strips out volatile items like fresh food and fuel, eased only slightly during the same period, to 3.95% from 4.12%. One board member said two problems persisted: “Services inflation persists at high levels and inflation expectations are still not consistent with convergence” to the 3% target. Another struck a more reassuring note, arguing the economy “has the capacity to absorb” supply-related shocks, citing solid macroeconomic fundamentals and the current monetary policy stance. Mexico’s economy grew 1.5% quarter-on-quarter in the second quarter, preliminary data showed, rebounding from a first-quarter contraction, though the board said the economy remained below full potential. Banxico still expects inflation to reach its 3% target by the fourth quarter of 2027.

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