LatinNews Daily - 20 February 2026

*Mexico’s central bank (Banxico) has released the minutes corresponding to its 5 February decision to pause its rate-cutting cycle and maintain its benchmark interest rate at 7%. Banxico announced that it will consider “additional adjustments” to the interest rate, and it will look to implement actions consistent with reaching the headline inflation objective of 3%. According to the minutes, “the majority [of the bank’s governing board] mentioned that headline inflation was at 3.77% in the first half of January.” While the minutes stated that “some agreed that this was lower than expected by analysts”, the majority of the board “noted that rising inflation between December and mid-January was due to the increase in core inflation”, which excludes volatile items such as food and fuel and is considered the best indicator of the direction of inflation. The board also noted the implementation, at the beginning of 2026, of changes to Mexico’s special tax on production and services (IEPS) and higher tariffs on imports from countries with which Mexico does not have a trade agreement, saying that “the impact of these fiscal measures has been reduced and localised for now”. According to the minutes, economic activity expanded in the fourth quarter of 2025, following a decrease in the third quarter, with most members noting that economic growth in 2025 was 0.5%. The document was released after official data indicated that headline inflation stood at 3.79% in January, up from 3.69% in December 2025, remaining above market expectations.

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