Mexico's central bank unexpectedly cuts its rate to 6.25%

What happened. On November 5 Banxico's Governing Board cut its overnight interbank rate target by 0.25 point to 6.25%. The new rate applies from November 6, 2026. Victoria Rodríguez Ceja, José Gabriel Cuadra García and Omar Mejía Castelazo voted for the cut. Galia Borja Gómez and Jonathan Heath voted to hold at 6.50%.

Why it is a surprise. In a Reuters poll, markets expected a hold. That made sense: headline inflation rose to 3.62% in the first half of October from 3.42% in the first half of September, and core inflation was 3.78%.

How the bank explains it. The statement says disinflation has continued, there is no demand pressure in the economy right now, and past tight policy is still working. From here, the board plans to hold the rate at this level for an extended period.

Forecasts. The Q4 2026 inflation forecast was raised to 3.7% from 3.5%, and core to 3.7% from 3.6%. The bank still expects inflation to reach its 3% target in Q4 2027. It sees the balance of risks to inflation tilted to the upside.

What it means. Peso loans may get a little cheaper. Peso savings may earn a little less. This is our view.

已确认的事实

• On November 5, 2026 Banxico cut its rate by 0.25 point to 6.25%, effective November 6.^[1]
• Three board members voted for the cut; two (Galia Borja Gómez and Jonathan Heath) voted to hold at 6.50%.^[1]
• The board said keeping the rate at this level for an extended period will be appropriate.^[1]
• Inflation rose from 3.42% to 3.62% between the first halves of September and October; core was 3.78%.^[1]
• The Q4 2026 inflation forecast was raised to 3.7% from 3.5%; the 3% target is expected in Q4 2027.^[1][2]
• In a Reuters poll, markets expected the rate to stay at 6.50%.^[2]

影响

• 已确认Mexico's key rate is now 6.25%.
• 已确认The bank signalled that its next decisions are likely to be holds.
• 我们的解读Returns on peso deposits may drift a little lower. This is our view.

仍未知

• How long the pause will last
• How the peso reacts in the coming days
• What the November 19 minutes show

影响到谁

Mexico, Latin America. Anyone with a loan, savings or investments in Mexican pesos, and anyone who follows interest rates

来源

1. Banco de México: Anuncio de Política Monetaria, 5 de noviembre de 2026 2026年11月5日 · 官方
2. Infobae (Reuters): Banxico sorprende al mercado y baja tasa de interés a un 6.25% 2026年11月5日 · 媒体
3. Bloomberg: Mexico Unexpectedly Cuts Key Rate to 6.25% for 'Extended Period' 2026年11月5日 · 媒体