Banxico expected to keep rates at 6.50% through 2027, Citi Mexico Survey shows

Expectations for Mexico’s economy from most private-sector economists featured in the survey published by Citigroup Mexico on 20 October.

Banxico Expected to Keep Rates Steady as USD/MXN Forecasts Rise

A rate of 6.50% is expected to be maintained by the Bank of Mexico, also known as Banxico, “through the end of 2027, with few participants anticipating any move.” The median projection for Mexico’s benchmark interest rate at the end of 2026 stands at 6.50%, while forecasts for 2027 span 6% to 7.25%.

The forecast for USD/MXN at the end of 2026 has risen to 18.20 from 18.00 in the previous survey. By the end of 2027, the pair is expected to reach 18.60, “with expectations ranging from 17.00 to 19.80.”

At the time of writing, the exotic currency pair is trading at 18.64, notably suggesting that the carry trade is continuing to lose momentum.

At 3.90%, the year-end headline inflation forecast is unchanged from the previous survey, while underlying inflation is expected to ease from 3.88% to 3.80%. For 2027, the headline projection has been raised to 3.86% from 3.83%; the core measure is expected to hold steady at 3.80%.

For the end of 2026, Mexico’s Gross Domestic Product (GDP) growth forecast remains at 1.4%, matching the previous survey. Estimates for 2027 range from 1% to 2.1%, with a median forecast of 1.8% economic growth.