Mexico central bank surprises with 'one-time' rate cut

Mexico's central ​bank cut its key ‌interest rate ​by 25 basis points to 6.25% on Thursday, in a ‌surprise to markets which had expected the rate to remain unchanged.

The five-member board of Banxico, as the ‌Mexican central bank is known, was split in its ‌decision. Three board members voted to cut the benchmark rate, while two preferred maintaining it at 6.50%.

Banxico said the governing ⁠board ​decided ⁠by majority to make a "one-time adjustment" to the rate, adding that ⁠holding the reference rate at the new level for ​an extended period will support the convergence of inflation ⁠to its target and will remain adequate to face external ⁠macroeconomic ​challenges. Banxico raised its fourth-quarter 2026 headline inflation forecast to 3.7% from 3.5% and its ⁠core inflation forecast to 3.7% from 3.6%. The central bank ⁠maintained ⁠its estimate that inflation will converge to its 3.0% target in the fourth quarter of ‌2027.