Bank of Mexico Holds Interest Rate at 6.50 Percent

The Bank of Mexico maintained its benchmark interest rate at 6.50 percent during its Thursday meeting, marking the second consecutive session without a change. The bank's board indicated that rates will likely remain at this level in the next meeting, extending a pause in a two-year easing campaign.

Policymakers are currently balancing slowing headline inflation, which hit a low of 3.1 percent in early July, against a weakening economy and persistent price pressures within the services sector. Deputy Governor Gabriel Cuadra identified the growth of services prices as a primary risk to the inflation outlook.

Due to these internal complexities and external uncertainties, including conflicts in the Middle East, the central bank pushed back its forecast for reaching its 3 percent inflation target. The bank now expects to hit this goal in the fourth quarter of 2027, a delay from its previous estimate of the second quarter.