Bank holds as expected: At its meeting on 21 November, the Central Bank of the Republic of Turkey (CBRT) decided...
Banxico Target Rate in Mexico
Mexico's central bank policy rates from 2013 to 2022 varied in response to economic conditions. Initially, rates were increased to control inflation, but were cut to stimulate growth during economic slowdowns, particularly during the COVID-19 pandemic. Post-pandemic, the focus shifted to controlling rising inflation, leading to increased rates.
The Banxico Target Rate ended 2022 at 10.50%, higher than the 5.50% end-2021 value and significantly above the rate of 3.50% a decade earlier. For reference, the average policy rate in Latin America stood at 18.90% at the end of 2022. For more interest rate information, visit our dedicated page.
Mexico Interest Rate Chart
Note: This chart displays Policy Interest Rate (%) for Mexico from 2023 to 2015.
Source: Macrobond.
Mexico Interest Rate Data
| 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|
| Banxico Target Rate (%, eop) | 7.25 | 4.25 | 5.50 | 10.50 | 11.25 |
| TIIE 28 Days Rate (%, eop) | 7.56 | 4.48 | 5.72 | 10.76 | 11.50 |
| 10-Year Bond Yield (%, eop) | 6.86 | 5.47 | 7.55 | 9.04 | 8.97 |
Central Bank decreases rates in November
Latest bank decision: At its meeting on 14 November, the Central Bank decided to reduce the target for the overnight interbank interest rate by 25 basis points to 10.25%, taking total rate cuts this year to 75 basis points.
Monetary policy drivers: The decision was primarily influenced by the fact that core inflation continued to trend down through October, as well as by the Bank’s downbeat economic outlook for 2025 and its view that GDP growth risks were skewed to the downside.
More monetary easing on the cards: The Central Bank said that it expects the inflationary environment to permit further rate cuts in the future, given the expected fading of global shocks and economic activity weakness. Our Consensus is for the policy rate to be over 200 basis points lower than its current level by end-2025.
Panelist insight: BBVA analysts said: “The stronger-than-expected pace of economic activity in the third quarter does not seem to have affected the confidence of board members in the inflation outlook. Banxico left the door wide open to rate cuts in upcoming meetings and signaled that the cycle has legs in a backdrop of a lack of growth dynamism next year. However, we now think that it might be somewhat more cautious next year with the Fed probably halting its cycle sooner the potential imposition of US tariffs.” Goldman Sachs’ Alberto Ramos said: “We expect the MPC to deliver another 25bp rate cut at the Dec meeting and in our assessment the bar to accelerate the pace of cuts to 50bp is relatively high given prevailing domestic and external uncertainty, in particular around a number of issues in the US-Mexico bilateral agenda (trade policy (tariffs) first-and-foremost).”
Consensus Forecasts and Projections for the next ten years
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Mexican interest rate projections for the next ten years from a panel of 34 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for Mexican interest rate.
Download one of our sample reports to visualize what a Consensus Forecast is and see our Mexican interest rate projections.
Want to get access to the full dataset of Mexican interest rate forecasts? Send an email to info@focus-economics.com.
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