
Banxico cut its benchmark interest rate by 25 basis points to 6.25%, despite inflation remaining close to 4%. Analysts criticized the decision, citing upside risks to inflation, including producer-price increases, currency depreciation, wage pressures, and possible weather effects from El Niño.
Lower Mexican interest rates relative to US rates may put downward pressure on the peso, increasing the local-currency cost of dollar-priced imports. The rate cut also reflects the central bank’s assessment of inflation risks and economic slack.
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