The Central Bank of Mexico slashed its overnight interbank interest rate for the fourth meeting in a row by 25 bps to 7.25 percent on 19 December 2019, as widely expected. Policymakers underscored that the peso has appreciated in recent days amid the signing of the new trade agreement with the United States and Canada. The Committee noted that the annual inflation rate was at 2.97% in November, as both non-core inflation and core inflation decreased over the last month and it will likely be below previous forecasts. They also underscored that inflation expectations decreased. Policymakers added that in the presence and possible persistence of factors that involve risks to both inflation and its expectations, monetary policy will be adjusted in a timely and firm manner to achieve the convergence of inflation to its target range. Interest Rate in Mexico averaged 5.74 percent from 2005 until 2019, reaching an all time high of 9.25 percent in October of 2005 and a record low of 3 percent in June of 2014. source: Banco de México
Interest Rate in Mexico is expected to be 7.25 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Mexico to stand at 6.50 in 12 months time. In the long-term, the Mexico Interest Rate is projected to trend around 6.50 percent in 2020, according to our econometric models.