Mexico's Central Bank Eases Rates Amid Cooling Inflation

The Bank of Mexico reduced its benchmark interest rate by 50 basis points to 9.50% due to lowering inflation. This decision, driven by most of the central bank's governing board, marks the largest rate cut since March 2024 and signifies Mexico's lowest interest level since September 2022.

The Bank of Mexico has taken decisive action to lower its benchmark interest rate by 50 basis points, setting it at 9.50% as inflation continues to decrease. This move signals potential future cuts of similar scale, aimed at spurring economic growth in the country.

Despite the overall consensus among the central bank's governing board, the decision did meet some dissent. Deputy Governor Jonathan Heath was the sole board member advocating for a smaller rate cut of 25 basis points, highlighting internal debate on how aggressively to lower rates.

With annual inflation in Mexico hitting its lowest mark in nearly four years at 3.69% in early January, the central bank's actions align with broader economic trends. Current inflation levels sit comfortably within the bank's target range, paving the way for continued monetary easing to support the economy.

(With inputs from agencies.)