“The Governing Board deemed it appropriate to continue with the cycle of reductions in the reference rate. This is consistent with the assessment of the current inflationary outlook,” highlighted the central bank.
The board members highlighted that the behavior of the exchange rate, the weakness that economic activity has shown and the possible impacts of changes in trade policies at a global level will help inflation.
Contrary to analysts’ forecasts, Banxico ruled out making changes to its inflation trajectory and maintained its forecasts that it will converge to 3% in the third quarter of 2026.
In November, the inflation rebounded to 3.8% due to the increase in electricity rates as well as public transportation; Core inflation was at 4.43%.
The investment bank UBS highlighted a report that part of the inflationary rebound could be reversed in December, due to seasonal effects associated with the Buen Fin.
After accumulating more than 400 basis points of accumulated cuts, experts expect Banxico to be more cautious in the coming months.
“January taxes and possible tariff transfer increase the likelihood of a pause in February,” Morgan Stanley analysts noted.
