Banxico keeps its rate at 6.50% while inflation rises to 3.42%

WHAT HAPPENED

Banxico kept its rate at 6.50% for the second consecutive meeting. Annual inflation rose to 3.42% and the bank delayed its 3% target until late 2027. The peso fell 2.29% for the week, to 17.56 per dollar.

WHY IT MATTERS

Higher inflation makes it less likely that Banxico will lower rates soon. Therefore, loans for housing, cars, and consumption will remain expensive. The weak peso also raises the cost of imports, travel, and gasoline, although it helps exporters.

AND FOR YOUR PORTFOLIO

For a long-term portfolio, the environment mixes effects: peso-denominated debt retains high rates, while companies dependent on credit and consumption may feel pressure. Exporters may benefit from a weaker peso.