Central Bank reduces rates: At its September meeting, the Central Bank of Peru (BCRP) decided to cut the reference interest...
Banxico Target Rate in Mexico
Mexico's central bank policy rates over the last decade varied in response to economic conditions. Initially, rates were increased to control inflation, but were cut to stimulate growth during economic slowdowns, particularly during the COVID-19 pandemic. Post-pandemic, the focus shifted to controlling rising inflation, leading to increased rates before another easing cycle began in 2024 as inflation pulled back. However, interest rates remain above pre-pandemic levels.
The banxico target rate ended 2024 at 10.00%, compared to the end-2023 value of 11.25% and the figure a decade earlier of 3.00%. It averaged 6.93% over the last decade. For more interest rate information, visit our dedicated page.
Mexico Interest Rate Chart
Note: This chart displays Policy Interest Rate (%) for Mexico from 2024 to 2015.
Source: Macrobond.
Mexico Interest Rate Data
| 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|
| Banxico Target Rate (%, eop) | 4.25 | 5.50 | 10.50 | 11.25 | 10.00 |
| TIIE 28 Days Rate (%, eop) | 4.48 | 5.72 | 10.76 | 11.50 | 10.24 |
| 10-Year Bond Yield (%, eop) | 5.47 | 7.55 | 9.04 | 8.97 | 10.36 |
Central Bank decreases rates in August
Latest bank decision: At its meeting on 7 August, the Central Bank decided to lower the target for the overnight interbank interest rate by 25 basis points to 7.75%. The move brought the cumulative reduction since early 2024 to 350 basis points, though rates are still high by regional standards.
Soft GDP and inflation outlook underpin cut: A further rate cut was motivated by the weak outlook for economic activity, and the Bank’s belief that both headline and core inflation will average within the 2.0–4.0% target range in the second half of this year and beyond.
Central Bank to ease further: Almost all panelists see more monetary easing later in 2025, of 25 to 75 basis points. Much will depend on U.S. trade policy towards Mexico; additional U.S. trade restrictions could warrant additional monetary support.
Panelist insight: EIU analysts said: “A weaker economy will provide room for Banxico to continue its easing cycle, particularly as softer domestic demand helps to bring inflation below Banxico's 4% target ceiling, despite the higher-tariff environment. However, we expect a slower pace of cuts going forward, with the policy interest rate ending 2025 at 7.5% and reaching a terminal rate of 7% by the first quarter of 2026.” Meanwhile, BBVA analysts said: “The forward guidance retained the strategic ambiguity introduced in June, reinforcing a data-dependent approach, with no explicit preference for the next move. We continue to expect Banxico to deliver three additional 25bp rate cuts this year, bringing the policy rate down to 7.00% by year-end.”
Consensus Forecasts and Projections for the next ten years
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Mexican interest rate projections for the next ten years from a panel of 33 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for Mexican interest rate.
Download one of our sample reports to visualize what a Consensus Forecast is and see our Mexican interest rate projections.
Want to get access to the full dataset of Mexican interest rate forecasts? Send an email to info@focus-economics.com.
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