6.25%: Banxico lowers rates by 25 basis points in an unexpected move

The Bank of Mexico lowered interest rates to 6.25% on Thursday. Known by its Spanish acronym Banxico, the central bank surprised market participants with a 25 basis points cut. They had anticipated no change from 6.50%.

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Economic Data Release

Banxico Interest Rate Announcement

At the close of each of its eight scheduled meetings a year, the Bank of Mexico (Banxico) announces its interest rate decision. A rate increase accompanied by a hawkish assessment of the economy’s inflation outlook is typically positive for the Mexican Peso (MXN). Conversely, a dovish assessment of the Mexican economy, coupled with unchanged or lower interest rates, is generally considered negative for MXN.

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Latest release: Thu 5 November 2026 19:00

Release schedule: Unscheduled

Reported figure: 6.25%

Consensus forecast: 6.5%

Prior reading: 6.5%

Data source: Banxico

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Banxico: Key Questions Answered

Bank of Mexico: Role and Mandate

3% is the Bank of Mexico’s inflation target. Also known as Banxico, the country’s central bank sets monetary policy and works to safeguard the value of Mexico’s currency, the Mexican Peso (MXN). Its primary objective is to keep inflation low and stable, at or near that target, which sits at the midpoint of a tolerance band between 2% and 4%.

Mexican Peso: The Impact of Banxico’s Monetary Policy

Interest rates are Banxico’s principal monetary policy tool. To curb above-target inflation, the bank raises rates, increasing borrowing costs for households and businesses and cooling economic activity. The resulting higher yields generally support the Mexican Peso (MXN) by making Mexico more attractive to investors. Lower rates, by contrast, tend to weaken MXN. A key consideration is the interest rate differential with the USD, including expectations for Banxico’s rate decisions relative to those of the US Federal Reserve (Fed).

Bank of Mexico: Annual Meeting Schedule

Banxico holds eight meetings a year. Decisions by the US Federal Reserve (Fed) strongly influence its monetary policy, so its decision-making committee typically convenes a week after the Fed. This allows Banxico to respond to, and at times anticipate, the Federal Reserve’s policy measures. Following the Covid-19 pandemic, for example, Banxico raised rates before the Fed did. It sought to reduce the risk of a substantial depreciation in the Mexican Peso (MXN) and prevent capital outflows that could destabilise the country.