Banxico lowers interest rate to 8.5%: Third consecutive cut

The Bank of Mexico (Banxico) announced its third consecutive cut to its benchmark interest rate on Thursday, lowering it by 50 basis points to 8.5%, its lowest level since 2022. The decision, taken unanimously by the five members of the Governing Board, reflects greater confidence in the downward trajectory of inflation.

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What does this cut mean?

This new reduction, widely anticipated by analysts and financial operators, confirms that Banxico is continuing on the path of monetary normalization, after years of high rates to contain inflation.

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Keys to Banxico's Decision

Cut size: 50 basis points (-0.50%)

Current target rate: 8.5% (from 9.0%)

Unanimous decision: All members voted in favor

Main reasons:

Lower inflationary pressure

Expectations anchored in the medium term

Stability of the peso against the dollar

> (CTA): Are you benefiting from this cut? Are you noticing any changes to your credit or savings? Share your opinion!

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Direct Impact on the Economy

Cheaper credit: Credit cards, personal loans, and even mortgages are expected to offer more affordable terms.

Relief for debtors: People with variable financing could experience lower monthly payments.

Savers on alert: Yields on bank notes, Cetes, and other conservative instruments will fall.

"The balance of risks to inflation has improved, but we remain vigilant. Monetary policy remains restrictive." — Official statement from Banxico

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What's next? Scenario towards the end of 2025

More cuts on the horizon: Analysts anticipate two or three additional adjustments if inflation continues to moderate.

Target: Inflation of 3% ±1 percentage point, the official objective of the central bank.

Risk factors: Exchange rate volatility, international energy prices, geopolitical tension.

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In short, Banxico is taking a more flexible stance, but without lowering its guard. The economic environment remains uncertain, although recent indicators allow for a bit of relief.

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