Banco de México lowered its overnight interbank rate by 25 basis points to 6.50% on Thursday, and declared that the cut brings to a close the easing cycle it began in March 2024. The reduction takes effect on 8 May 2026.
The decision, taken by the Governing Board at its scheduled monetary policy meeting, was carried on a split 3-2 vote. Governor Victoria Rodríguez Ceja and Deputy Governors Galia Borja Gómez replaced by the recorded majority — Rodríguez, Cuadra and Mejía — voted in favour of the cut. Deputy Governors Borja and Jonathan Heath dissented, preferring to keep the reference rate unchanged.
FOURTEEN CUTS AND A CUMULATIVE 475 BASIS POINTS
Thursday's move is the fourteenth consecutive cut delivered by the Board since it began easing in March 2024. In cumulative terms, the reference rate has been reduced by 475 basis points from a peak of 11.25%, the level at which policy was held for much of the post-pandemic tightening cycle.
The pace and depth of the cycle reflect what the Board has described as an orderly disinflation process in Mexico. Having delivered the bulk of that adjustment already, policymakers used Thursday's statement to draw a line under the sequence of reductions rather than to signal a further shift lower over coming meetings.
The dissent from Borja and Heath underscores the finely balanced judgement facing the Board. Both members preferred to leave the rate unchanged at 6.75%, a stance consistent with concerns that domestic price pressures and external conditions warrant a more cautious final step.
BOARD SIGNALS EXTENDED HOLD AHEAD
In its accompanying communication, the Board said it considered it appropriate to maintain the reference rate at the new 6.50% level going forward. The guidance marks a clear pivot from a cutting bias to a steady-state stance, tying the near-term outlook to incoming inflation data rather than to a preset path.
By framing the reduction as the conclusion of the easing cycle, Banxico has signalled that any further movement in policy will require a fresh assessment of the balance of risks. The Board did not indicate that additional cuts remained on the table, effectively closing off market expectations for a continuation of the sequence at the next scheduled meeting.
The decision leaves Mexico's benchmark rate 475 basis points below its cycle peak but still well above the levels seen before the global tightening episode. With the easing phase formally over, attention now turns to how long the Board judges it appropriate to hold at 6.50%, and to whether inflation dynamics vindicate the majority's assessment that the current setting is consistent with a durable convergence to target.
Banxico published the decision on its website alongside the voting record, in line with its standard practice for monetary policy announcements. The Board's decision to end the easing cycle after 14 consecutive cuts caps one of the most sustained sequences of policy loosening among major emerging-market central banks. Having delivered a cumulative 475 basis points of reductions from the 11.25% peak, Banxico ends the sequence with a benchmark that remains restrictive on standard measures while offering the Board room to react to fresh developments should the outlook shift materially.