LatinNews Daily - 7 February 2025

*Mexico’s central bank (Banxico) has lowered its benchmark interest rate by 50 basis points to 9.50%, marking its fifth consecutive rate cut and the first of this scale in the current cycle. Despite annual inflation easing to 3.69% in the first half of January, the lowest level since early 2021, Banxico cautioned that risks remain, including exchange rate pressures and geopolitical uncertainties. The governing board signalled that further rate cuts of a similar magnitude could be considered, provided inflation stays on course to reach the 3% target. While medium and long-term expectations have remained relatively stable, they are slightly above Banxico’s 3% target. The central bank projects that inflation will converge to this target by the third quarter of 2026.