Banxico Holds Rate at 6.5%, Shifts Guidance

Banxico's board voted unanimously to hold the overnight rate at 6.50% for a third straight meeting. Officials removed language that had tied Mexican policy to expected Federal Reserve moves and said future decisions will depend on incoming data, the disinflation process, exchange-rate pass-through, slack and inflation expectations. The Fed had raised rates before this decision; a narrower U.S.-Mexico rate gap can pull capital out of peso assets, yet Banxico said it need not respond mechanically. First-half September inflation was 3.42% headline and 3.79% core, inside the one-point tolerance band around the 3% goal. The bank left Q4 2026 headline at 3.5% and Q4 2027 at 3.0%, but raised the Q4 2026 core view to 3.6% from 3.5%. It still sees a return to 3% in Q4 2027. Briefs.co said the prior target date was Q2 2025 Natixis Americas chief economist Benito Berber wrote, "We believe Banxico will not be bullied into hiking." In August the board wrote that "it will be appropriate to maintain the reference rate at its current level." All 23 economists in a Bloomberg survey had expected the hold.