The Bank of Mexico, as expected, held its benchmark interest rate at 11.00% on Thursday, in a unanimous decision by its governing board, as persistent inflation in Latin America’s second-largest economy remains above the bank’s target range.
Banxico, as the Mexican central bank is known, also revised its inflation forecasts upwards for the following six quarters, “considering that inflationary shocks are foreseen to take longer to dissipate.”
The decision came hours after new data from Mexico’s statistics agency showed that annual headline inflation sped up slightly more than expected in April, reaching 4.65%, above the central bank’s target range of 3%, plus or minus one percentage point.
Banxico’s five-member board now sees headline inflation reaching its target in the fourth quarter of 2025, later than the second quarter of 2025 that it had previously forecast.
All of the analysts polled by Reuters had predicted the board would hold the rate after its much-anticipated 25-basis-point rate cut in late March brought the rate down from a record high of 11.25%.
Some board members have recently expressed caution about future rate cuts as inflation remains stubborn.