The Bank of Mexico is forecast to reduce its benchmark interest rate by 50 basis points to 9% during its 27th March meeting, according to a recent Reuters poll.
This move comes amid slowing inflation and a sluggish economic outlook.
Out of 25 economists surveyed, 23 anticipate a 50-basis-point cut, mirroring February’s reduction and accelerating the rate-cutting cycle that started last year when the rate stood at a record 11.25%.
The remaining two economists predicted that Banxico, Mexico's central bank, would keep its interest rate unchanged.
This would align with the US Federal Reserve's recent decision to maintain rates, citing uncertainty over President Donald Trump's evolving tariff policies.
In its previous monetary policy meeting, Banxico indicated that it would consider further rate cuts of 50 basis points, like the one in February, if inflation conditions permitted.
The annual headline inflation rate has been declining since peaking at 8.7% in 2022, its highest level in over 20 years. As of February, inflation stood at 3.77% over the past 12 months, falling within Banxico's official target range of 3%, plus or minus one percentage point.
“The inflation scenario hasn't changed,” stated James Salazar, deputy director of economic analysis at CIBanco. “That provides grounds and consolidates the idea that another 50-basis-point cut is coming.”
Although economic growth is not part of Banxico's mandate, analysts suggest that a weak outlook for Latin America's second-largest economy, exacerbated by Trump's tariff threats, could increase pressure on the central bank to keep lowering borrowing costs, Reuters reports.
Mexico's gross domestic product contracted by 0.6% in the fourth quarter, marking its first decline in over three years.
Furthermore, among 17 analysts who provided forecasts for Banxico's next decision on 15th May, all but one anticipate another rate cut, though opinions differ on the size of the reduction.
According to the median estimate from 19 forecasts for the final quarter of 2025, the key interest rate is projected to end the year at 8.25%, its lowest level in nearly three years.