LatinNews Daily - 08 May 2026

*Mexico’s central bank (Banxico) has lowered its benchmark interest rate by 25 basis points, bringing the rate to 6.50%. This is the second consecutive rate cut following a cut of 25 basis points in March. Once again, the decision split Banxico’s board with three voting in favour of the cut and two against. In a statement, Banxico stated that the uncertainty associated with the conflict in the Middle East had “moderated, although remains high”. Despite the cut, Banxico stated that it would maintain the rate at its current level going forwards due to “the challenges of the macroeconomic environment, including those derived from a prolongation and escalation in the conflict in the Middle East and its repercussions”. Banxico’s decision came the same day as the national statistics institute released the consumer price index for April, showing that inflation stood at 0.20% in monthly terms and at 4.45% in annual terms. This is down from monthly inflation of 0.86% in March when annual inflation stood at 4.59%. This marks the first deceleration in annual inflation since December, coming in below forecasts of economists polled by Reuters. Core inflation, which excludes volatile items such as food and energy, stood at 0.31% in monthly terms and 4.26% in annual terms, down from and 0.38% and 4.45% respectively in March.

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