Latest bank decision: At its meeting on 15 May, the Central Bank decided to lower the target for the overnight...
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 2022 at 10.50%, higher than the 5.50% end-2021 value and significantly above the rate of 3.50% a decade earlier. For reference, the average policy rate in Latin America stood at 18.90% at the end of 2022. 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 May
Latest bank decision: At its meeting on 15 May, the Central Bank decided to lower the target for the overnight interbank interest rate by 50 basis points to 8.50%, marking the third straight 50 basis-point reduction. The move aligned with market expectations and brought the cumulative reduction since early 2024 to 275 basis points.
Within-target inflation and weak economic outlook prompt cut: Further sizable cuts were motivated by core and headline inflation which are within the 2.0–4.0% target range and should remain so in coming quarters, weak current economic activity, and sizable downside risks to the GDP growth forecast posed by U.S. tariffs.
Central Bank to cut rates further: The Central Bank reiterated that it might continue cutting rates in “similar magnitudes” in future meetings. Our Consensus is for around 100 basis points of cuts by end-2025, with forecasts ranging from 25 to 175 basis points.
Panelist insight: Itaú Unibanco analysts said: “We continue to expect another 50-bp cut in June. Beyond that, we anticipate a more cautious approach, with two 25-bp cuts in August and September, leading to a terminal rate of 7.5% in 2025.” Meanwhile, BBVA analysts said: “A worsening outlook clouded by concerns about the pace of economic activity appear to be weighing heavily on the Board’s judgment in favor of continued easing. If Banxico transitions to a slower 25 bp pace from July onward and cuts at every remaining meeting this year, the policy rate could easily reach 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 37 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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