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BBVA Research Says Mexico's Central Bank Signals March Is Too Soon to Resume Rate Cuts After Thursday's Hold

BY MT Newswires | ECONOMIC | 07:01 AM EST

07:01 AM EST, 02/06/2026 (MT Newswires) -- The Board of Mexico's central bank (Banxico) unanimously decided to keep the policy rate unchanged at 7.00% on Thursday, signaling that demand-side pressures aren't a key driver behind its policy assessment, said BBVA Research.

Banxico's updated core inflation path now matches BBVA Research's forecasts for the first half of the year, while the central bank turned less optimistic on non-core inflation over this period.

A hawkish tweak to the forward guidance narrows the scope for near-term easing and reinforces BBVA Research's view that March would be too soon to resume the easing cycle.

BBVA Research continues to expect Banxico to remain on hold in the coming meetings, as it assesses the effects of the temporary shocks to inflation from recent fiscal adjustments.

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

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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