MediumIV Macro Policy & Sovereign Debt24 September 2026, Thursday · 22:00 TRT (UTC+3)

Banxico unanimously holds its policy rate at 6.50%; early-September inflation beats expectations at 3.42% while core eases to 3.79%

The Bank of Mexico left its policy rate at 6.50% on 24 September for a third consecutive meeting. Inflation for the first half of September, released the same morning, came in at 3.42%, above the 3.37% expected; the peso had lost 1.37% on 23 September.

Location: MEXICO CITY

According to a Reuters report published on Investing.com, Banxico's five-member board unanimously held the rate at 6.50% on 24 September, its third consecutive hold. The bank changed its forward guidance to say that future decisions will take into account the ongoing disinflation process; according to the report, inflation risks are tilted to the upside and headline inflation is projected to converge to the 3% target in the final quarter of 2027. The rate has stood at 6.50% since a 25 basis point cut by a 3–2 vote in May 2026; according to Mexico Business News, total cuts since March 2024 had reached 475 basis points.

According to INEGI data reported by IndexBox, annual inflation in the first half of September rose from 3.26% in August to 3.42%, beating the 3.37% expected; core inflation fell from 3.93% to 3.79%, with monthly increases of 0.33% in the headline and 0.17% in the core. According to The Rio Times, the peso closed 23 September at 17.531 per dollar after a daily loss of 1.37%; the draft 2027 budget assumes a 6.0% interest rate and a deficit of 3.9% of GDP. With the Fed raising its rate to 3.75–4.00% on 16 September, the interest rate differential between Mexico and the US narrowed to around 250–275 basis points.

Talay assessment

Bottom line

Banxico has shelved a return to cuts while the Fed tightens, but has not moved to hikes either: core inflation easing to 3.79% buys it time, while headline inflation rising to 3.42% and the peso's 1.37% daily loss tie its hands. The most likely path is for the rate to stay at 6.50% until the end of the year.

Likely effects

Peso and carry tradesNegativeWeeks
Banxico holding at 6.50% while the Fed lifts its rate to 3.75–4.00% narrows the rate differential, increasing the peso's sensitivity to Fed decisions.
Mexican inflationPositive1–6 months
Core inflation easing to 3.79%, within the target band, limits the risk of the energy-driven headline increase becoming entrenched.
Emerging market central banksUncertain1–6 months
Banxico's emphasis that it will not react mechanically to the Fed sets an example for the domestically focused wait-and-see strategy of emerging market central banks, including the CBRT.

Possibilities, ranked

1
Rate on hold until year-end60%
Core inflation keeps easing and the peso does not spiral; Banxico holds the rate at 6.50% in November and December.
Watch: Core inflation staying below 3.8% in the mid-October inflation data
2
Hike under currency pressure25%
If the Fed hikes in October and the peso weakens beyond 18, Banxico makes a defensive hike.
Watch: USD/MXN exceeding 18.0 and the October Fed decision
3
Renewed cuts15%
If growth weakens and inflation falls faster than expected, Banxico returns to cuts towards the 6.0% assumption in the 2027 budget.
Watch: A contraction in third-quarter GDP data

Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.

Market reaction

Indicators affected

Banxico policy rate▲ 6.50% (hold)
Early-Sept. inflation▲ 3.42%
Core inflation▼ 3.79%
USD/MXN (23 Sep)▲ 17.531 (+1.37%)

Bottom line

Likely effects

Possibilities, ranked

Sources