Mexico Monetary Policy


Mexico: Central Bank cuts interest rates, closes door on additional easing

October 25, 2013

At its 25 October monetary policy meeting, Mexico's Central Bank (Banxico) decided to trim the overnight target interest rate by 25-basis-points to 3.50%. The move, which was broadly expected by the market, follows a similar 25-basis-point cut at the Bank's previous meeting. The Central Bank has cut the overnight interest rate by a total of 100 basis points in 2013 to date.

Banxico stated that, after having registered weak growth in the first half of the year, recent indicators suggest that economic activity improved in the third quarter as the negative impact of external shocks is gradually fading. Nonetheless, the Bank recognized that a considerable degree of slack remains in the labor market and in the overall economy. Regarding price developments, the Bank stated that inflation remains contained and that the recent hurricanes that affected several areas of the country did not have a significant impact on consumer prices.

The Bank concluded that inflation expectations for 2014 increased slightly, mainly due to the possible effects of the fiscal measures that were implemented in the fiscal reform. Moreover, the Bank underlined that, taking into account the fiscal policy for next year, the monetary stance is still in line with the expectation that inflation will settle at the Bank's permanent 3.0% target in 2014 and that additional reductions in the benchmark interest rate are not recommended for the foreseeable future.

The majority of LatinFocus Consensus Forecast panelists expect the Bank to stay put this year, leaving interest rates at 3.50%, with a Consensus average of 3.52%. For next year, panelists expect Banxico to tighten the reins, resulting in a 3.63% year-end projection.

Author:, Senior Economist

Sample Report

Looking for forecasts related to Monetary Policy in Mexico? Download a sample report now.


Mexico Monetary Policy Chart

Mexico Monetary Policy October 2013

Note: Banxico target rate (Tasa objetivo de fondeo bancario) in %.
Source: Mexico Central Bank (Banxico).

Mexico Economic News

  • Mexico: Consumer confidence hits decade-high following AMLO’s win

    August 3, 2018

    Consumer sentiment jumped in July on the heels of the 1 July general election, with the seasonally-adjusted consumer confidence index published by INEGI hitting a decade-high 101.7 points, up from a revised 88.6 points in June (previously reported: 88.0 points).

    Read more

  • Mexico: Banxico holds rates in August

    August 2, 2018

    At its 2 August monetary policy meeting, Banxico’s five-member board voted unanimously to hold the target rate at 7.75% after previously hiking rates ahead of the 1 July general election, a move broadly in line with market expectations.

    Read more

  • Mexico: Remittance inflows accelerate in June

    August 1, 2018

    Remittances totaled USD 3.1 billion in June (May: USD 3.2 billion), a robust 23.1% increase from the same month last year, accelerating from the revised 17.1% rise registered in May (previously reported: +19.8% year-on-year).

    Read more

  • Mexico: Growth disappoints in Q2 amid election-year challenges

    July 31, 2018

    A preliminary estimate for economic activity in the second quarter confirmed the challenges facing the economy in the run-up to the 1 July general election, with growth in the quarter coming up short against market expectations.

    Read more

  • Mexico: Trade deficit widens in June

    July 27, 2018

    Merchandise trade recorded a USD 0.9 billion deficit in June (May: USD 1.6 billion deficit), widening markedly from the USD 0.0 billion trade balance registered in June 2017.

    Read more

More news

Search form