FX.co ★ Mexico Keeps Benchmark Rate Unchanged

Mexico's central bank left its benchmark interest rate unchanged at 6.50% at its August meeting, matching market expectations. Policymakers said the decision maintains an appropriately restrictive monetary stance as inflation continues to moderate, though risks remain skewed to the upside.

Annual inflation slowed to 3.10% in the first half of July from 3.55% in mid-June, while core inflation eased to 3.95%. The bank expects inflation to keep declining gradually, with headline inflation projected to converge to the 3% target in the fourth quarter of 2027.

Banxico also noted that Mexico’s economy rebounded in the second quarter after contracting in the previous quarter, although downside risks to growth persist. The board reiterated that it expects to maintain the benchmark rate at its current level for now, citing uncertainty stemming from geopolitical conflicts, global trade policies, and their potential impact on inflation.