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Banxico leaves policy rate at 6.50%, signaling extended pause

Societe Generale expects inflation to converge to target in 4Q27, while oil-linked external risks and a potentially hawkish Fed keep Mexican easing on hold.

Reported · Written up by our desk · Central Banks

Banxico kept its policy rate at 6.50%, signaling it is likely to maintain its pause for an extended period, according to analysis cited by FXStreet. The view is that inflation remains near target levels and real interest rates are close to neutral, reducing the urgency to cut.

Societe Generale also pointed to an outlook in which inflation is expected to converge to the central bank’s target in 4Q27. At the same time, FXStreet said external risks, including oil prices and the possibility of a more hawkish Federal Reserve, argue against further easing.

With those factors in place, the analysis suggested Mexican rates should remain on hold for longer, as investors weigh both domestic inflation progress and global rate expectations.

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