The Bank of Mexico ended the sharpest tightening cycle in its history on May 18, as its governing board held its policy rate at 11.25%.

Banxico’s board voted unanimously to hold the rate, which it started increasing in June 2021 and has since boosted by 725 basis points. It paused rates despite inflation remaining well over the 3% target.

The board’s policy statement said the economy “has started to undergo a disinflationary process”. It still forecasts that inflation will converge to Banxico