Bank of Mexico Cuts Interest Rate 25 Bps to 7.75% Amid Slowdown

The Bank of Mexico reduced its benchmark interest rate by 25 basis points to 7.75%, marking its lowest level in three years and slowing the pace of monetary easing after four consecutive half-point cuts. The decision, made by a divided board with one dissenting vote to hold the rate, comes amid ongoing trade tensions with the United States and persistent economic uncertainty. The central bank cited the need to balance bringing inflation back to its 3% target—despite headline inflation falling to 3.51% in July and core inflation remaining higher at 4.23%—with efforts to support economic growth, which has shown recent signs of improvement. The move was widely anticipated after previous indications from the bank that it would switch to smaller cuts, reflecting caution in an environment of global economic risks. The bank will continue to assess future rate adjustments based on inflation trends, economic activity, and international developments.