LatinNews Daily - 26 June 2026

*Mexico’s central bank (Banxico) has announced it is holding its benchmark interest rate at 6.50%, in a unanimous vote. The decision follows two consecutive 25 basis point cuts in May and March. In a statement, Banxico stated that uncertainty continues surrounding the conflict in the Middle East and its repercussions, while noting that recent negotiations are pointing towards a solution. Banxico stated that the economy is expected to expand in the second quarter of 2026, following the contraction in the previous quarter. However, it said that “slack conditions are still expected throughout the forecast horizon, and significant downside risks to economic activity persist”. In terms of inflation, Banxico said that between April and the first half of June, annual inflation in Mexico fell from 4.45% to 3.55% as a result of a drop in both headline and core inflation, which fell from 4.26% to 4.12%. It said that inflation forecasts for the end of the year have decreased slightly, while long-term forecasts remained stable at levels above target. “Looking ahead, the governing board considers that it will be appropriate to maintain the reference rate at its current level,” stated Banxico.

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