The Central Bank of Mexico published minutes of the meeting underpinning its Aug. 6 monetary policy decision, showing that all five board members voted to maintain the overnight interbank rate at 6.50%. The board indicated that it will be appropriate to keep the rate at its current level, judging the stance adequate to address inflation risks and international uncertainty. Annual headline inflation fell to 3.10% in the first half of July, while core inflation declined to 3.95%, returning within the variability range around the 3% target. However, the bank now expects headline and core inflation to decline more gradually than previously forecast, with headline inflation converging to target in the fourth quarter of 2027. The risk balance remains tilted to the upside because of persistent services inflation, geopolitical and trade disruptions, possible cost and climate pressures, and the potential reversal of historically low noncore inflation. Mexico’s economy rebounded in the second quarter after contracting in the first, but the output gap remained negative and the board saw no aggregate demand pressure on prices. Members also cited the peso’s appreciation and the continuing effects of monetary restraint as supporting disinflation, while differing in their emphasis on the degree of slack and the sufficiency of the current stance.
2026-08-20Central Bank of Mexico
Central Bank of Mexico minutes show unanimous support for holding policy rate at 6.50%
Central Bank of Mexico minutes show that the board unanimously held the policy rate at 6.50% and considers it appropriate to maintain that level. Inflation is expected to converge to the 3% target in the fourth quarter of 2027, more gradually than previously forecast. Risks remain tilted upward, particularly from persistent services inflation and geopolitical, trade and supply shocks.