Mexico Central Bank Eyes Final Rate Cut as Inflation Eases
Governor Victoria Rodriguez says inflation will soon resume its decline toward the three percent target. The board may consider a final rate cut in May.
Bank of Mexico Governor Victoria Rodriguez told a Senate committee Tuesday that inflation will resume its decline toward the 3% target following a temporary spike in food prices. The announcement follows a 25-basis-point rate cut in March that lowered the benchmark interest rate to 6.75%. Investors are tracking the central bank’s pivot as it balances a sluggish economy against a 4.53% annual inflation rate.
### Banxico Signals the End of Easing Rodriguez stated that the board is nearing the conclusion of the rate-cutting cycle it initiated in early 2024. The USD/MXN exchange rate remains sensitive to these policy shifts after the March 3-2 split vote revealed deep divisions among policymakers. While the board previously lowered borrowing costs, Rodriguez indicated that only one final cut may remain on the table for the upcoming May session.
