MEXICO CITY (Reuters) -The Bank of Mexico held its benchmark interest at 11.25% on Thursday for a fifth consecutive monetary policy meeting, as expected, underscoring it would maintain the reference rate at its current level for “some time,” a moderation in language from previous statements.
The decision by the central bank’s five-member board was unanimous.
All analysts polled in a Reuters survey had expected Banxico, as the central bank is also known, to hold borrowing costs at the current all-time high of 11.25%. The rate has sat steady since March, following the central bank’s rate-hiking cycle that began in June 2021.
In a statement, Banxico said that expectations for headline inflation remained unchanged from its last monetary policy meeting in September.
The bank’s board maintained a previous forecast of inflation converging to the bank’s target of 3%, plus or minus a percentage point, in the second quarter of 2025.
“In order to achieve an orderly and sustained convergence of headline inflation to the 3% target, the reference rate must be maintained at its current level for some time,” the bank said.
The language marks a change from previous rate decisions that forecast the rate’s hold “for an extended period.”
“Although the outlook remains complicated, progress on disinflation has been made,” the bank said.
Inflation has been steadily declining in Latin America’s second-largest economy, with data earlier in the day showing inflation easing in October for the ninth consecutive month.
Annual headline inflation hit 4.26% last month, down from 4.45% in September and the lowest since February 2021, although still above Banxico’s target of 3%, plus or minus one percentage point.
(Reporting by Isabel Woodford, Brendan O’Boyle and Anthony Esposito; Editing by Lisa Shumaker)
