Mexico central bank seen holding rates for third straight meeting Sept. 24

Mexico’s central bank is expected to keep its benchmark rate unchanged for a third straight meeting on September 24, according to all economists polled, with no broad expectation of a near-term move. Banxico is likely to highlight higher inflation risks in its policy statement, but the tone is expected to stay balanced amid weak economic conditions and tighter US monetary policy. 50% this week, according to all 32 economists polled August 15-21, extending the current pause in a gradual easing cycle the bank implemented from 2024 to the start of this year. Median quarterly forecasts showed Mexico’s key rate remaining steady at least until the second half of 2028.

"The Bank of Mexico sees inflation trends as relatively aligned with its most recent forecasts, though the risk outlook obviously remains," said Jesus Lopez, deputy head of research at Banco Base. "In fact it has become more complex, so they" Analysts said concerns about the possible fallout from last week’s US Federal Reserve interest rate increase have added to uncertainty over the future of Mexico’s long-standing free trade agreement with Washington and Ottawa. Policymakers are expected to reiterate their view of a soft economy, in line with the cut to this year’s growth estimate in Mexico’s 2027 budget proposal.

In an extra question on Banxico’s next move, 13 respondents took part. Eight forecast a rate cut, all at different times, while five saw the next move as an increase. 26% in August, while core trends improved somewhat. Banxico targets a 2%-4% range for the headline measure.

Domestic consumer prices have picked up in recent weeks on higher grain and crude oil costs tied to Black Sea supply concerns and the US-Iran war. Reporting by Noe Torres in Mexico City. Editing by Ross Finley and Jan Harvey. Gabriel Burin: +54 11 2039-6646.