Banco de México held its overnight interbank interest rate at 7.00% at its February 2026 monetary policy meeting, the central bank announced on 5 February 2026 via its official publications page. The unanimous decision was the first pause since June 2024, ending a run of 12 consecutive cuts in an easing cycle that began in March 2024, when Banxico started reducing rates from 11.25%. The board said the pause reflected higher inflation forecasts and the need to keep assessing the fiscal changes introduced at the start of the year, the exchange rate, weak economic activity and the degree of monetary restriction already in place.
Inflation remains above Banxico's 3.0% target. Headline inflation eased slightly from 3.80% in November to 3.77% in the first half of January, while core inflation rose to 4.47%.
INFLATION FORECASTS RAISED
Mexican inflation peaked at nearly 9% in 2022. Banxico also raised its inflation forecasts and now expects headline inflation to converge to the 3% target in the second quarter of 2027.
Banxico's target is 3.0% with a tolerance band of plus or minus one percentage point. Core readings above 4% sit outside the tolerance band.