Banxico cuts interest rates for the fourth time in a row

For the fourth time in a row, the Bank of Mexico (Banxico) cut the reference rate by 50 basis points, which increased from 8.50 to 8 percent.

This was announced by the Mexican central bank in its monetary policy announcement following the meeting of the Governing Board. Only Deputy Governor Jonathan Heath voted to keep the rate unchanged.

The markets had already discounted that the Central Bank would make another downward adjustment of the same magnitude as the previous ones, given that it stated so in the forward-looking guidance.

Analysts said it was expected because they had already conveyed that message, otherwise the exchange rate would be affected.

However, they considered that for the following announcements, Banxico would moderate its easing with reductions of 25 basis points.

3% inflation, a goal still a long way off

Banxico's decision comes in the face of a scenario in which the monetary authority It is still far from returning to the specific target of 3% that was set to have low and stable inflation in favor of the poorest.

During the first half of June, the National Consumer Price Index, which measures inflation in Mexico, It stood at 4.51%, according to Inegi.

Also, after last week's Federal Reserve (Fed) Open Market Committee kept interest rates unchanged in a range of 4.25% to 4.50% at the end of a two-day meeting, the vote was unanimous.

Later on Tuesday, Fed Chairman Jerome Powell hinted to members of Congress that he could begin cutting rates in response to the impact of tariffs on inflation.

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