Banco de México Holds Policy Rate at 6.5% Amid Ongoing Inflation Concerns

On 25 June, the Board of Governors of the Banco de México (Banxico) voted unanimously to keep the reference interest rate at 6.50%, signalling a prolonged pause in monetary tightening. The decision follows a sharp decline in headline inflation to 3.55% year‑over‑year, but the board highlighted that core inflation remains at 4.19%, above its 3% target, and that risks are still weighted to the upside.

Banxico cited modest demand pressures, the current exchange‑rate environment, and the lingering effects of recent fiscal measures on food prices as reasons to maintain the current stance. The central bank expects inflation to converge to 3% by the second quarter of 2027 and warned that any shift in its forward guidance will depend on forthcoming data, potentially paving the way for a rate increase later in the year.