The Mexican central bank kept rates at 6.50%, sparking a rally in the Peso as traders bet on prolonged tight policy.
The Mexican Peso surged 0.62% to 17.49 per USD after Banxico unanimously held its benchmark interest rate at 6.50%. The decision defied some expectations for a cut amid persistent inflation concerns.
Prior to the announcement, the USD/MXN pair had climbed to a one-and-a-half-month high. Analysts had split on whether Banxico would signal a shift toward easing, but the hold reinforced its hawkish stance.
The Peso’s gains accelerated post-decision, reflecting investor relief over the central bank’s commitment to anchoring inflation expectations.