Mexico central bank sells 12-month CETES: average yield 7.83%

Mexico central bank sells 12-month CETES: average yield 7.83%

The Mexican central bank, Banco de México, recently sold 12-month Certificados de la Tesorería (CETES) with an average yield of 7.83%. This sale comes amidst a backdrop of revised economic growth estimates and ongoing monetary policy adjustments.

In its latest quarterly report, the Banco de México raised its economic growth estimates for 2025 and 2026. The central bank now expects gross domestic product (GDP) to expand by 0.6% in 2025, up from its previous estimate of 0.1%, and by 1.1% in 2026, up from 0.9%. The better-than-expected performance in the second quarter of 2025 contributed to these revised estimates [1].

Despite the imposition of various import tariffs by the U.S. and persistent uncertainty over the economic policies of that country, economic activity in Mexico expanded more than expected in the second quarter. The central bank expects slow growth in the remainder of 2025 and a "moderate expansion" in 2026. Consumption is expected to continue growing at a modest pace, while investment is likely to remain weak, and the reduction in the fiscal deficit will limit public spending's contribution to growth [1].

In response to a contraction in the fourth quarter of 2024 and a sluggish first quarter of 2025, the Banco de México has implemented four consecutive half percentage-point interest-rate cuts. The benchmark interest-rate target was last lowered to 7.75% on August 7, with further cuts of a similar size likely [1].

The central bank also expects inflation to average 3.7% in the fourth quarter of 2025, returning to its 3% target in the third quarter of 2026.

The sale of 12-month CETES at an average yield of 7.83% reflects the current monetary policy stance and the market's expectations for future economic conditions in Mexico. Investors and financial professionals should closely monitor the Banco de México's monetary policy decisions and economic forecasts as they continue to shape the Mexican economy.

References:
[1] https://www.marketscreener.com/news/bank-of-mexico-raises-economic-growth-estimates-ce7c50dddc8bf123