Bank of Mexico’s Sixth Interest Rate Cut Since March 2024, and More Are Likely – Currency Thoughts

Bank of Mexico’s Sixth Interest Rate Cut Since March 2024, and More Are Likely

May 15, 2025

Today’s half percentage point cut of Mexico’s overnight interbank interest rate had been expected and was agreed upon by everyone on the Bank of Mexico Governing Board. To counter the spike in inflation that crested at 8.7% in September 2022, the central bank policy interest rate had been lifted to 11.25% by March 2023 and maintained at that level for a full year. The policy stance with the rate now at 8.5% is sufficient above the 3.9% latest consumer price inflation rate to constitute a restrictive policy stance, and officials are currently projecting inflation “to converge to the target in the third quarter of 2026,” according to a statement released today. “Looking ahead officials could continue calibrating the monetary policy stance and consider adjusting it in similar magnitudes. It anticipates that the inflationary environment will allow it to continue the rate cutting cycle.”

Copyright 2025, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

Tags: Bank of Mexico

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on Thursday, May 15th, 2025 at 3:26 pm and is filed under Central Bank Watch.
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