Primer: Banxico rate decision due Thursday 24th September at 20:00BST/15:00EDT

Banxico is widely expected to leave rates unchanged at 6.50%. In its latest Minutes from the prior meeting, the Governing Board estimated that it will be appropriate to maintain the reference rate at its current level. In most recent remarks, Deputy Governor Heath stated recent inflation data is very good, but not a victory, and that risk assessment is on the rise, number one factor is persistent services inflation. Heath added there would be no rate cuts in the short-term as it is necessary to check progress on inflation, and a cut might be possible in a year. In its latest forecasts, released end of August, it forecasted 2026 GDP growth at 1.5% (prev. 1.1%) and 2027 GDP growth at 2.0% (prev. 2.1%); sees average annual core inflation in Q4 of 3.5% (prev. 3.4%) and annual average headline inflation in Q4 of 3.5% (prev. 3.5%). As stated in its last confab, headline inflation seen converging to 3% target in Q2 2027. Overall, Oxford Economics continue to expect Banxico to leave the policy rate at 6.50% through the remainder of 2026; they note the fall in core inflation below 4% is encouraging, but persistent services inflation and the risk of further temporary shocks give policymakers little reason to resume easing soon.