On November 5, 2026, Banco de México cut its benchmark rate by 25 basis points to 6.25%, its lowest level since February 2022. As a result, the spread against the U.S. Federal Reserve narrowed to 225 basis points, a record low, according to Bloomberg Línea.

The U.S. rate sits in a range of between 3.75% and 4.00%, and the lower threshold reduces the appeal of the Mexican currency for carry trade operations, according to El CEO. For Javier Guzmán Calafell, a former Banxico deputy governor between 2013 and 2020, the central bank must carefully monitor the evolution of the exchange rate, because in an open economy capital movements respond immediately to the rate spread. The peso closed the November 5 session with a depreciation. The most recent Citi survey, cited by El CEO, puts the parity at 18.50 pesos per dollar for December, versus 18.20 previously, with forecasts hovering around 19.00 pesos.

The Board of Governors approved the cut in a split vote, and 21 of 36 analysts in the Citi survey had not anticipated it, Bloomberg Línea reported. Janneth Quiroz, director of Analysis at Grupo Financiero Monex, said the peso depreciated 1.3% against the dollar after the announcement and reversed the move a little more than an hour later, and explained that a weaker currency pressures the prices of imported electronics, appliances, vehicles, spare parts and machinery. Marco Oviedo, senior strategist for Latin America at XP Investments, put the exchange rate at 18.70 pesos per dollar. The central bank justified the adjustment on the grounds that the disinflationary process has continued and that the pass-through of exchange-rate variations to prices is limited given the economy's slack conditions.

Banxico said it is considering holding the rate at 6.25% for an extended period, and its next monetary policy announcement is scheduled for December 17, 2026. Aranxa Sánchez, chief economist at Bankaool, anticipated that there will be no additional cut at that meeting, while the Federal Reserve defines its path in December.

This article was written with the assistance of artificial intelligence from verified sources and reviewed by a human editor before publication.