Mexico inflation close to resuming decline toward target, governor says

Mexico’s inflation is close to resuming its decline toward Banxico’s 3% target, and the central bank is nearing the end of its rate-cutting cycle, Governor Victoria Rodriguez said on April 28.

Reuters reported that Rodriguez made the remarks in Senate testimony, saying inflation should continue to ease gradually after a recent rebound in food prices. She said Banxico’s board is close to finishing the easing cycle that began in early 2024.

The latest official data show inflation is still above target. INEGI reported annual inflation of 4.53% in the first half of April, while Banxico cut its benchmark overnight rate by 25 basis points to 6.75% on March 26.

Rodriguez’s comments suggest policymakers believe inflation pressure is cooling enough for the current tightening cycle to wind down, even if prices remain above the central bank’s target band. That leaves the May policy meeting as the next key test of how far Banxico is willing to go.

The signal matters for markets because it points to a possible pause after a long easing run. It also suggests Banxico will remain focused on whether inflation keeps drifting lower rather than rebounding again.

For now, the message from the governor is that Mexico’s inflation path still points downward, but the central bank is likely close to the end of its cuts.