Mexico’s Sheinbaum Backs Further Banxico Rate Cuts to Spur Investment

Mexican President Claudia Sheinbaum said she supports additional reductions in Banco de México’s benchmark interest rate, arguing that cheaper credit would stimulate investment and economic growth. “While the rate is lower, more credit and investment can flow into our country,” she told reporters at her daily press conference on Friday. Banxico lowered the policy rate by half a percentage point to 8% in late June, its fourth consecutive cut of that size. A slowdown in inflation to 4.32% last month, after four months of increases, has strengthened expectations that the central bank could continue easing but at a slower pace. Sheinbaum dismissed concerns that price pressures are linked to the cuts, calling recent food-price spikes seasonal. The president also urged commercial banks to pass on lower borrowing costs, especially to small and medium-sized enterprises. Her administration and the Mexican Bankers Association signed an agreement in May to expand SME lending by 3.5% annually between 2025 and 2030, a target she said will be easier to meet if interest rates keep falling.