08:20 AM EST, 02/07/2025 (MT Newswires) -- Mexico's central bank (Banxico) lowered the policy rate by 50bps to 9.50% on Thursday, noted BBVA Research.

The Board noted last weekend's "significant depreciation" of the peso, but its attention seems to be more focused on "the weakness of the Mexican economy," said BBVA Research.

Banxico left both its headline and core inflation forecasts broadly unchanged as it continues to expect inflation to fall below 3.5% in Q3 2025 and to drop to 3.0% in 2026.

The statement's forward guidance signals a set of consecutive rate cuts ahead and keeps the door wide open for additional large cuts, stated BBVA Research.

Thursday's larger cut supports BBVA Research's below-consensus 8.0% rate by the end of the year, but it now thinks there's a bias towards more easing this year.