Bank of Mexico cuts interest rates again by 50 points to 8%.

MEXICO CITY.- This Thursday, the Bank of Mexico (Banxico) lowered the interest rate to 8% , its eighth consecutive cut and the fourth of 50 basis points , considering the current inflationary outlook , the degree of monetary restriction and the "sluggishness" of the economic outlook .

In its announcement, within market expectations, the central bank argued that it deemed it "appropriate to continue calibrating the monetary stance, taking into account the behavior of the exchange rate , the weakness of economic activity , and including the potential impact of changes in global trade policies."

With the presence of all its members, the Board of Governors of #BancodeMéxico decided by majority to reduce the One-Day Interbank Interest Rate to 8.00%, effective June 27, 2025. See the statement at: https://t.co/ARSAcrBLAO pic.twitter.com/dik1IHeCI5

— Bank of Mexico (@Banxico) June 26, 2025

The move contrasted with that of the U.S. Federal Reserve (Fed), which last week kept interest rates at a range of 4.25% to 4.5% despite public calls from U.S. President Donald Trump for further immediate cuts.

The decision, approved by a majority but with one vote against, is the eighth consecutive cut since the meeting of March 21, 2024, when the Governing Board reduced the rate for the first time since March 2023 amid improved inflation expectations.

Analysts had expected this resolution from Banxico after it was reported last Thursday that Mexico's overall inflation rate climbed to 4.51% annually in the first half of June.

The Governing Board stated that it will "consider additional cuts to the reference rate," taking into account the effects of all determinants of inflation.

He stated that the actions implemented will seek to ensure that the reference rate "is consistent, at all times, with the trajectory required to promote the orderly and sustained convergence of headline inflation to the 3% target within the planned timeframe."

The central bank raised its forecast for average headline inflation to 3.7% for the last quarter of 2025 and warned that the balance of risks to the projected inflation trajectory "remains skewed to the upside," although "this is less pronounced than that faced between 2021 and 2024."

Banxico announced that the upside risks include currency depreciation, disruptions due to geopolitical conflicts or trade policies , persistent underlying inflation , cost pressures , and climate impacts .

He also noted that economic policy changes by the Trump administration have added uncertainty to the outlook, and their effects could put pressure on inflation on both sides of the balance sheet.

This was the fourth decision of the year by the Mexican central bank, and its next monetary policy meeting will be held on August 7.

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 flexibility with reductions of 25 basis points.

Banxico's decision comes amid a scenario in which the monetary authority is still far from returning to its stated target of 3% to achieve low and stable inflation that benefits the poorest.

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

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