Image Source: Unsplash

Banco de Mexico (Banxico) revealed the minutes of the August 7 monetary policy meeting, in which the central bank decided to reduce rates by 25 basis points (bps) to 7.75% on a vote split, with Deputy Governor Jonathan Heath in favor of keeping rates unchanged.

Central bank reduced rates to 7.75% in August; future easing will hinge on inflation dynamics despite upside risk

The minutes mentioned that inflation fell to 3.51% in July and subdued economic growth despite the modest rebound in the second quarter of 2025, as the main reasons behind the Mexican institution's decision.

Alongside this, the central bank cited that the appreciation of the Mexican Peso in 2025 is helping to contain inflation amid trade tensions and tariff uncertainty.

Besides this, the board noted that they “will consider additional cuts to the benchmark rate.” However, it would depend on inflation dynamics, even though Banxico sees the risks of inflation tilted to the upside.

USD/MXN reaction to the minutes

(Click on image to enlarge)

More By This Author:

USD/JPY Price Forecast: Consolidates But Falls Below 50-Day SMA
GBP/USD Slides As Fed Governor Cook Faces Fraud Allegations, UK Inflation Surges
Gold Slumps On Geopolitical Developments, Strong Dollar Ahead Of Powell’s Speech