LatinNews Daily - 28 March 2025

*Mexico’s central bank (Banxico) has lowered its benchmark interest rate by 50 basis points for the second time this year in its sixth consecutive rate cut, bringing the rate to 9.0%. With inflation levels at 3.67% in the first half of March and a core inflation rate of 3.56% in the same period, Banxico’s governing board stated that the “disinflationary process has continued to advance” and is on track to reach the 3% target by the end of 2026. However, Banxico cited currency depreciation, disruptions caused by geopolitical factors and trade policies, core inflation, cost pressures and weather as key risks affecting inflation forecasts. It also highlighted economic uncertainties generated by policies introduced by the new US administration of President Donald Trump. Despite these risks, Banxico forecasts still expect inflation levels to reach the 3% target by the third quarter of 2026. The governing board anticipates that rate cuts will continue amid the favourable inflationary environment and will consider in doing so factors such as weak economic activity and the impact of the restrictive monetary stance.

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