Banxico sets official peso exchange rate at 18.6368/USD

Banxico sets official peso exchange rate at 18.6368/USD

The Mexican peso steadied around 18.76 per USD on July 2, 2025, after the Bank of Mexico (Banxico) announced a 25 basis point cut to its benchmark rate to 7.75%. This decision was made through a divided vote, reflecting the bank's cautious approach to monetary policy despite easing measures [1].

The official peso exchange rate was set at 18.6368/USD, not far from its recent low of 18.88 seen earlier this month. The central bank's minutes revealed that headline inflation eased to 3.51% in July, while core inflation remained elevated at 4.23%. This mix of easing monetary policy and lingering inflation concerns has led to offsetting forces in the market, with some investors welcoming the rate cut as dovish while others remain cautious about persistent cost pressures [1].

The decision to cut rates by 25 basis points was tempered by the omission of prior language promising further cuts. Instead, Banxico acknowledged that inflation remains above target and economic growth remains modest. The bank's forward guidance was moderated, signaling a more measured approach to monetary policy.

Investors are closely watching the Mexican peso's performance in response to Banxico's latest move. The exchange rate's stability around 18.76 per USD indicates a balanced market response to the central bank's decision. As the Mexican economy continues to navigate inflationary pressures, the peso's performance will be a key indicator of market sentiment and economic conditions.

References:
[1] https://www.tradingview.com/news/te_news:479637:0-mexican-peso-steady-after-banxico-minutes/