Bank of Mexico Resumes Rate Cuts with Split 3-2 Decision to 6.75%

Key Facts

The Bank of Mexico (Banxico) has resumed its monetary easing cycle by lowering its benchmark interest rate by 25 basis points to 6.75%. The decision followed a split 3-2 vote by the board of governors, ending a temporary pause despite annual inflation accelerating to 4.63%. Analysts at ING noted that this rate cut leaves the Mexican Peso (MXN) particularly exposed and vulnerable to market volatility. The narrow margin of the vote highlights significant internal debate regarding the balance between price stability and economic growth. According to ING, the reduction in yield attractiveness is likely to increase downside pressure on the currency. Market participants are now closely monitoring the Peso's performance as the central bank prioritizes economic support over policy tightening.

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