Bank of Mexico, slowing pace of cuts, brings key rate to lowest in three years
The decision by the bank's five-member governing board brings the rate to 7.75%, its lowest since mid-2022.
Deputy Governor Jonathan Heath was the sole dissenter, voting to hold the interest rate.
The move was largely expected by the market after the bank's governing board signaled at its last meeting in June that it would move to smaller reductions after four consecutive cuts of a half of a percentage point.
Banxico, as the Bank of Mexico is known, has been balancing dual challenges. It is seeking to bring down inflation while also stimulating the economy amid weak economic growth and uncertainty tied to trade tensions and geopolitical developments.
In a statement, the central bank said the board's decision "took into account the behavior of the exchange rate, the weakness of economic activity, and the possible impact of changes in trade policies worldwide."
The bank said the board will assess further adjustments to the benchmark rate in future meetings.
Official data earlier on Thursday showed that Mexico's annual headline inflation slowed in July to 3.51%, its lowest level since late 2020, although the closely-watched core index remained above the bank's official target at 4.23%.
Banxico targets inflation at 3%, plus or minus a percentage point.
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