Mexico: Banxico Cuts Rates by 25bps to 7.25%, As Expected.

The Bank of Mexico cut its benchmark interest rate by 25 bps to 7.25% in its November meeting, in line with market expectations, bringing it to its lowest level since May 2022, and indicated it would consider further easing at future meetings. The decision came amid ongoing concerns about global trade tensions and weakening economic activity in the country. In a statement on Thursday, the bank said it took into account “the weakness of economic activity” and persistent global uncertainty in its decision to lower borrowing costs. Between the first half of September and the first half of October, annual core inflation eased slightly from 4.26% to 4.24%, while headline inflation decreased from 3.74% to 3.63%. In updated forecasts released on Thursday, Banxico maintained its estimate for year-end annual core inflation at 4.2% in the fourth quarter, while projecting headline inflation to converge to the 3% target by the third quarter of 2026.