Banxico reduced rates from 7.25% to 7% as widely expected

Banxico has made the decision to lower the interest rates from 7.25% to 7% during its December policy meeting. This 25 basis point cut aligns with broad market expectations and was determined by a 4-1 vote. Deputy Governor Jonathan Heat dissented, favoring a maintenance of the rate. The rate cut is seen as a signal of potential economic recovery, although balancing it against inflation pressures remains crucial. The authorities have indicated they will closely monitor future economic indicators, suggesting a positive short-term impact on the Peso but also highlighting ongoing risks due to thin market liquidity.