The Bank of Mexico, also known as Banxico, held rates unchanged at 6.50% as expected by most analysts, unanimously, for the third consecutive meeting, after ending its easing cycle in May.
More to come, story on development… Banxico FAQs The Bank of Mexico, also known as Banxico, is the country’s central bank
Its mission is to preserve the value of Mexico’s currency, the Mexican Peso (MXN), and to set the monetary policy. To this end, its main objective is to maintain low and stable inflation within target levels – at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%. The main tool of the Banxico to guide monetary policy is by setting interest rates.
When inflation is above target, the bank will attempt to tame it by raising rates, making it more expensive for households and businesses to borrow money and thus cooling the economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN.