Bank of Mexico Cuts Interest Rate Unexpectedly
November 6, 2026
Other central bank interest rate announcements since Tuesday had revealed increases in the U.K., Sweden, Australia, Armenia, Czech Republic and Moldova, as well as decisions to leave rates steady in Malaysia, Uzbekistan, Norway and Brazil. However, from the Bank of Mexico late yesterday came unexpected and contrary news of a 25-basis point reduction in the overnight interbank rate to 6.25%. This was the third cut of 2026 but the first one since the first third of the year. There had been a total of eight cuts in 2025 for a combined drop of three percentage points, and the rate level coming into yesterday’s review of 6.50% was already well down from a former cyclical peak of 11.25% prevailing for the year through March 2024. Adding to the surprise of yesterday’s 3-2 vote to cut the rate again, consumer price inflation in Mexico had been drifting higher, enough so for central bank officials to revise upward projected total and core yearend inflation to 3.7%. and to assert in today’s statement that “The balance of risks for the trajectory of inflation within the forecast horizon remains biased to the upside. The changes in economic policy by the US administration and a
possible extension of geopolitical conflicts continue adding uncertainty to the forecasts. Their effects could imply pressures on inflation on both sides of the balance.” The justification for the interest rate cut was summed up as follows:
The Governing Board judged that the disinflation process continues. It assessed that, under the prevailing
slack conditions, the pass-through of exchange rate fluctuations to consumer prices would be limited. It
estimated that no demand-side pressures are currently perceived in the Mexican economy and that the
level of monetary restriction implemented continues operating.
Copyright 2026, Larry Greenberg. All rights reserved.
Tags: Bank of Mexico
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