Interest Rate Decision (Banxico) in Mexico

The overnight interbank target rate set by the Governing Board of the Bank of Mexico (Banxico). It is Mexico's benchmark monetary policy rate, the equivalent of the US Federal Funds Rate.

It is not a statistical estimate but a decision taken by Banxico's Governing Board at its monetary policy meetings, held on a set annual calendar of eight dates, and quoted as a percentage.

The key reference for the Mexican peso (MXN), the debt market and domestic credit. A rate hike, or hawkish guidance, tends to strengthen the peso and lift yields, while a cut aims to stimulate activity and usually weakens the currency.

It is a discrete decision rather than a continuous series: it only moves at the eight scheduled meetings and holds steady between them. What drives the market is less the level than the surprise versus expectations and the forward guidance.