Bank of Mexico's governor says inflation fight enters new phase

Mexico's inflationary environment is expected to allow policymakers to keep cutting the benchmark interest rate, the head of the Bank of Mexico told Reuters, as the fight to bring down inflation has entered a new phase. Banxico, as the Mexican central bank is known, cut the key rate by 50 basis points to 9.50% on Thursday, double the 25-basis-point cuts it had made since it began lowering borrowing costs from a record high of 11.25% in March 2024. Last week's rate reduction brought Mexico's interest rate to its lowest since September 2022 as annual inflation in Latin America's second-biggest economy slowed to 3.69% in the first half of January.