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SocGen Sees Mexico's Central Bank Cutting Rates by 25bps on Thursday

BY MT Newswires | ECONOMIC | 11/06/25 09:51 AM EST

09:51 AM EST, 11/06/2025 (MT Newswires) -- Mexico's central bank (Banxico) is expected to cut 25bps to 7.25% on Thursday, marking a third straight reduction as it proceeds with the easing cycle, said Societe Generale.

Banxico is expected to release the policy statement at 2 p.m. ET on Thursday.

The decision is expected to be split, with Deputy Governor Jonathan Heath likely to dissent due to persistent core inflation, stated the bank. Most officials will highlight improving inflation, with both headline and core figures surprising to the downside in October and the stronger peso (MXN) helping contain prices.

The economy contracted less than feared in Q3 (-0.3% quarter over quarter versus the estimate of -0.4%), but headwinds from trade uncertainty and tariffs, as well as Federal Reserve rate cuts, give Banxico room to ease further, pointed out SocGen.

Looking ahead, the bank anticipates another 25bps cut in December, and further cuts through 2026 to 6.5% by year-end, though risks remain skewed to the downside given the soft growth outlook.

Overall, Banxico's cautious but dovish stance should keep USD/MXN relatively range-bound between 18.20 and 18.80, according to Scotiabank.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.

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