Mexico's Central Bank Cuts Interest Rates Amid Easing Inflation
The Bank of Mexico has reduced its benchmark interest rate by 25 basis points to 10.25%, marking its third consecutive rate cut. The decision reflects improved inflation forecasts and an ongoing decline in core inflation. However, Mexico's headline inflation rate slightly increased in October.
The Bank of Mexico has reduced its benchmark interest rate by 25 basis points to 10.25%, marking its third consecutive rate cut. The central bank made the announcement following a unanimous decision, highlighting the improving inflation outlook in the region's second-largest economy.
Banxico, the central bank, indicated that core inflation is expected to continue its downward trend. In October, a key indicator excluding volatile prices showed a 3.80% increase year-over-year, down from 3.91% in September. This move follows a similar rate cut by the U.S. Federal Reserve.
Despite these signs of easing inflation pressures, Mexico's annual headline inflation rate in October rose slightly to 4.76% from September's 4.58%. Banxico aims for a headline inflation target of 3%, with a tolerance range of one percentage point.
(With inputs from agencies.)