Mexico surprises markets with rate cut in split decision
Central bank faces headwinds from weak growth and oil shock
The Bank of Mexico (Banxico) has lowered its key interest rate by a quarter point to 6.75% in a split decision, amid weak growth and rising inflation.
In a statement following the decision on March 26, the central bank’s governing board said the conflict in the Middle East and an “environment of uncertainty” continued to pose downside risks for the Mexican economy.
The five-member board voted 3–2 to cut rates, thereby resuming the bank’s easing cycle. Banxico had held rates in February, having
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