Mexico’s central bank reduced its benchmark interest rate by a quarter-percentage point to 7.75%, slowing the pace of monetary easing after four consecutive half-point cuts earlier in the year. The decision by Banxico’s five-member board takes effect on 8 August and had been widely anticipated by financial markets. The move was approved in a 4–1 vote, with Deputy Governor Jonathan Heath favoring no change. At 7.75%, the key rate now stands at its lowest level in three years, down from 8% previously but still well above the bank’s 3% inflation target. Policymakers cited a continued cooling of consumer-price pressures: headline inflation fell to 3.51% in July, while the core gauge remained higher at 4.23%. Banxico said it will weigh “all determinants of inflation” when considering additional, likely smaller, adjustments in coming meetings. Ahead of the announcement the peso weakened about 0.24% to 18.64 per dollar as traders positioned for the expected quarter-point move. Economists at firms including Bank of America and Morgan Stanley had forecast the smaller cut, arguing that the central bank needs to balance disinflation progress with signs of softening domestic demand.