Central Bank remains on hold: At its meeting on 17–18 July, the Monetary Policy Committee of the National Bank of...
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 June
Latest bank decision: At its meeting on 26 June, the Central Bank decided to lower the target for the overnight interbank interest rate by 50 basis points to 8.00%, marking the fourth straight 50 basis-point reduction. The move aligned with market expectations and brought the cumulative reduction since early 2024 to 325 basis points.
Weak economic outlook prompts cut: A further sizable rate cut was motivated by weak current economic activity as well as downside risks to the GDP growth forecast posed by U.S. tariffs. Upward revisions to the Bank’s inflation forecasts—inflation is now seen above the 4% upper bound of the target range until Q4—did not dissuade the authorities from cutting.
Central Bank to ease further: The Central Bank hinted that it might cut rates further in future meetings. All panelists see more monetary easing in 2025. Much will depend on U.S. trade policy towards Mexico; additional U.S. trade restrictions could warrant additional monetary support.
Panelist insight: Itaú Unibanco analysts said: “Given recent inflation dynamics and lower interest rate differentials with the US, we believe Banxico will opt for more cautious pace going forward, with two 25-bp cuts in August and September, leading to a terminal rate of 7.5% in 2025.” Meanwhile, BBVA analysts said: “Our baseline remains that the policy rate will reach 7.00% by year-end, near the upper end of Banxico’s estimated neutral range—essentially just shy of being restrictive. While the Board’s revised forward guidance reflects greater caution, it does not represent a break in the easing cycle in our opinion.”
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 35 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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