Banxico lowers rates to 6.25% in an unexpected 25 basis point cut

A 25 basis point interest rate cut to 6.25% by the Bank of Mexico on Thursday surprised market participants, who had anticipated no change at 6.50%. The central bank is known by its Spanish acronym, Banxico.

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Economic Data Release

Banxico Sets Interest Rates

At the conclusion of each of its eight scheduled meetings a year, the Bank of Mexico (Banxico) announces its decision on interest rates. A rate increase accompanied by a hawkish assessment of the economy’s inflation outlook is typically supportive of the Mexican Peso (MXN). Conversely, when Banxico takes a dovish view of the Mexican economy and either leaves rates on hold or lowers them, the decision is generally regarded as negative for MXN.

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Latest release: Thu 05 Nov 2026 19:00

Release frequency: Irregular

Actual figure: 6.25%

Consensus forecast: 6.5%

Previous figure: 6.5%

Data source: Banxico

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Banxico: Key Questions Answered

The Bank of Mexico Sets Monetary Policy and Protects the Currency’s Value

An inflation target of 3%, the midpoint of a tolerance band between 2% and 4%, underpins the Bank of Mexico’s main objective of keeping inflation low and stable, at or near that target. Also known as Banxico, the institution is Mexico’s central bank. Its remit is to safeguard the value of the country’s currency, the Mexican Peso (MXN), and set monetary policy.

Banxico’s Interest Rate Decisions Influence the Mexican Peso

Interest rates are Banxico’s principal monetary policy tool. To curb above-target inflation, the bank seeks to cool the economy by raising rates, which increases borrowing costs for households and businesses. The higher yields associated with higher interest rates generally support the Mexican Peso (MXN), as they make 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).

Banxico Holds Eight Meetings a Year, Usually Following the Fed

Eight monetary policy meetings take place at Banxico each year. Decisions by the US Federal Reserve (Fed) heavily influence its policy, so the central bank’s decision-making committee normally convenes a week after the Fed. This allows Banxico to respond to, and sometimes anticipate, the Federal Reserve’s monetary policy measures. Following the Covid-19 pandemic, for instance, Banxico raised rates ahead of the Fed. It sought to reduce the risk of a sharp depreciation in the Mexican Peso (MXN) and prevent capital outflows that could destabilise the country.

Banxico lowers rates to 6.25% in an unexpected 25 basis point cut

Economic Data Release

Banxico Sets Interest Rates

Banxico: Key Questions Answered

The Bank of Mexico Sets Monetary Policy and Protects the Currency’s Value

Banxico’s Interest Rate Decisions Influence the Mexican Peso

Banxico Holds Eight Meetings a Year, Usually Following the Fed

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Banxico lowers rates to 6.25% in an unexpected 25 basis point cut

Economic Data Release

Banxico Sets Interest Rates

Banxico: Key Questions Answered

The Bank of Mexico Sets Monetary Policy and Protects the Currency’s Value

Banxico’s Interest Rate Decisions Influence the Mexican Peso

Banxico Holds Eight Meetings a Year, Usually Following the Fed

POPULAR ARTICLES

Related News Articles

LIVE QUOTES

ALL ABOUT FOREX

Contacts

Markets

Trading Platform

Start Trading

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