Latest news with #Banxico
Reuters
29-05-2025
- Business
- Reuters
Bank of Mexico's rate decision marked by trade policy pressures, minutes show
MEXICO CITY, May 29 (Reuters) - All of the Bank of Mexico's five governing board members agreed in the monetary authority's most recent rate decision that the period has been marked by high uncertainty due to trade policy announcements worldwide, minutes published on Thursday showed. "Some activity indicators surprised to the downside partly due to the effects of trade uncertainty at the global level," said the Mexican central bank. Most board members also noted that changes in trade policy have added significant uncertainty to the global economic outlook. Adding to global concerns, a U.S. trade court on Wednesday blocked most of U.S. President Donald Trump's tariffs, arguing he had overstepped his authority. Banxico, as the central bank is known, slashed its growth forecast for Mexico's economy this year to 0.1%, from its previous estimate of 0.6%, citing sluggish domestic activity and uncertainty related to U.S. trade policy, according to its quarterly report published on Wednesday.
Bloomberg
28-05-2025
- Business
- Bloomberg
Banxico Cuts 2025 Growth Forecast to 0.1% and to 0.9% for 2026
Mexico's central bank lowered its growth forecasts for this year and next amid mounting signs that Latin America's second-biggest economy is stalling. Banxico, as the bank is known, cut its 2025 gross domestic product growth forecast to 0.1% in its central scenario, from 0.6% previously, according to the presentation of its quarterly inflation report. The bank sees the economy growing 0.9% next year, from the 1.8% estimate in February's report.
Reuters
15-05-2025
- Business
- Reuters
Mexico central bank cuts interest rate but flags trade tensions, weak economy
MEXICO CITY, May 15 (Reuters) - The Bank of Mexico lowered its benchmark interest rate by 50 basis points for the third consecutive meeting on Thursday, as inflation remains within the bank's target range but uncertainty persists around trade tensions and a weak economy. The unanimous decision by the bank's governing board, which was expected by analysts polled by Reuters, brings Mexico's benchmark rate to 8.50%, its lowest level since August 2022. In a statement announcing the decision, the Mexican monetary authority said it could consider cutting the rate by a similar magnitude at future meetings. The decision comes days after official data showed headline inflation in Latin America's no. 2 economy hit 3.93% on an annual basis in April, accelerating from the previous month but still within the central bank's target range. Banxico, as Mexico's central bank is known, targets inflation at 3%, plus or minus a percentage point. The bank said its board took into account Mexico's weak economic activity, "as well as the possible changes in trade policies worldwide." Banxico upheld its expectation that inflation will converge to its 3% target in the third quarter of 2026, but flagged risks from trade tensions with the United States, its top trading partner. "The changes in economic policy by the new U.S. administration have added uncertainty to the forecasts," Banxico said, warning that U.S. policies could move inflation in either direction. Analysts polled by Reuters in late April said the uncertainty around U.S. President Donald Trump's tariffs will likely hurt private spending and investment in Mexico throughout the rest of the year. Mexico's gross domestic product expanded just 0.2% in the first quarter of 2025, according to official data, allowing the country to narrowly avoid a technical recession. A Reuters poll forecast the same rate of growth for the full year. For economic growth, "the environment of uncertainty and trade tensions poses significant downward risks," Banxico said.
Bloomberg
15-05-2025
- Business
- Bloomberg
Banxico Delivers Third Straight Half-Point Cut as Growth Slows
Mexico's central bank cut borrowing costs by half a percentage point Thursday after the economy narrowly avoided falling into recession and inflation remained within the target range. Banxico, as the bank is known, lowered its key rate to 8.5%, as expected by all 30 economists surveyed by Bloomberg. Seven consecutive rate reductions, including three straight half-point cuts, have trimmed the benchmark rate by 2.5 percentage points.
Reuters
12-05-2025
- Business
- Reuters
Bank of Mexico seen cutting key rate by 50 basis points
May 12 (Reuters) - The Bank of Mexico will likely cut its benchmark interest rate by 50 basis points at its meeting on May 15, taking it to 8.5%, according to a Reuters poll on Monday, as inflation remains near target and worries linger over weak economic activity. Of 31 economists surveyed, 30 expect the central bank to deliver its third consecutive cut of 50 basis points, after cutting by that margin in February and March. The outlier projected the bank would keep the rate at its current level, in light of the U.S. Federal Reserve's warning last week of higher inflation and unemployment due to President Donald Trump's tariff policies. At the last monetary policy meeting, Banxico, as Mexico's central bank is known, said it could consider further significant rate adjustments in its subsequent decisions if the inflation outlook allows. Since hitting a more than two-decade high of 8.7% in 2022, Mexico's annual inflation rate has fallen to within Banxico's target range of 3%, plus or minus a percentage point. Inflation rose to 3.93% in the 12 months through April, but still within the target range. Analysts noted that members of the governing board have recently been emphasizing their concerns about weakening economic activity. Although growth is not part of the central bank's mandate, a weaker outlook is seen adding pressure on the governing board to continue reducing borrowing costs. "Current inflation and the economic outlook should allow Banxico to continue monetary easing at the same 50 bp pace as the first two rate cuts this year," Barclays said. "Furthermore, we believe the decision on a 50 bp cut will be unanimous." Mexico's gross domestic product expanded just 0.2% in the first quarter, avoiding a technical recession after GDP in the fourth quarter contracted for the first time in more than three years. Analysts and officials have said the risks of another contraction remain. Of 21 experts who shared forecasts for Banxico's subsequent decisions, 19 foresee another rate cut at the bank's June meeting, although they were divided on the magnitude. The two others said the next rate cut could come as late as August. The key rate is expected to close the year at 7.75%, which would be its lowest level since mid-2022, according to the median of 23 forecasts received for the final quarter of 2025.
