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Banxico holds interest rate at 6.5%, expects it to stay put
🇵🇾 Paraguay /Economy & Trade

Banxico holds interest rate at 6.5%, expects it to stay put

From ABC Color · () Spanish

Translated from Spanish, summarized and contextualized by DistantNews.

At a glance

News Official statement New plan
  • Mexico's central bank, Banxico, maintained its benchmark interest rate at 6.5% in a unanimous decision.
  • The bank anticipates keeping the rate at this level for the remainder of the year, citing slowing inflation and global economic uncertainty.
  • While inflation has decreased, Banxico warned of upward risks due to geopolitical tensions and global economic volatility.

The Bank of Mexico (Banxico) has decided to keep its benchmark interest rate unchanged at 6.5%, a move unanimously approved by its Governing Board. This decision aligns with market expectations and follows a previous hold in June and a 25-basis-point cut in May. Banxico anticipates maintaining this rate throughout the rest of the year.

The bank's decision is based on an assessment of the inflationary outlook, a lack of demand pressures in the economy, and the current level of monetary restriction. Inflation has shown a downward trend, with the general inflation rate falling from 3.55% to 3.10% between June and mid-July. The core inflation rate also decreased from 4.12% to 3.95% during the same period.

Banxico has lowered its forecast for general inflation in the second quarter of 2026, attributing this to reduced non-core price pressures. However, the bank expects inflation to converge gradually towards its 3% target by the fourth quarter of 2027. Despite these positive signs, Banxico cautioned that risks to inflation remain tilted upwards.

Global factors contributing to this upward risk include ongoing geopolitical tensions, particularly the conflict in the Middle East and its economic repercussions. International financial markets have experienced volatility, and the US dollar has depreciated. The US Federal Reserve also maintained its interest rate in July, reflecting similar concerns about economic uncertainty.

Going forward, the Governing Board considers it appropriate to maintain the benchmark interest rate at its current level.

— Bank of Mexico (Banxico)In its official statement explaining the decision to hold the interest rate steady.
DistantNews Editorial

Originally published by ABC Color in Spanish. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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