Mexico’s April Inflation Reading Supports Case for Another Banxico Rate Cut in June

  • The Rio Times, the Latin American financial news outlet, reports that Mexico's consumer price index rose 0.11% in the first half of April 2026 compared with the previous fortnight, taking the annual Mexico inflation rate for April to 4.53%, according to INEGI data[1] released on April 23. The reading is marginally below the 4.55% registered in the second half of March and notably below the 4.63% reading of the first half of March.
  • The CPI sat at 3.96% year-on-year in the same period of 2025. The index remains above Banco de México's 3% target for the 141st consecutive fortnight, with the central bank's tolerance band running from 2% to 4%. Core inflation rose 0.18% fortnightly and 4.27% year-on-year, with goods at 4.10% and services at 4.44%.
  • The softer headline reading supports the case for another 25 basis-point rate cut at Banxico's next meeting in June. A Citi survey published this week puts the policy-rate close for 2026 at 6.5%, which would imply one additional cut from the current level. The trajectory has been clear. Banxico has delivered sustained easing through the first four months of 2026 as the headline rate has drifted down from the peaks of 2024.
  • For international investors tracking the Mexican peso and Banxico-priced instruments, the April  inflation reading keeps the easing cycle alive but does not accelerate it. The peso had been trading stable against the dollar into the release, with markets watching the US-Iran ceasefire negotiations.
  • The April 23 INEGI release is the last inflation data point before Banxico's June decision window opens, and the core reading, softer than the headline and decelerating, is the number most closely tracked. The commercial gasoline trajectory will also be critical, with the fuel subsidy expected to continue through Q2 2026.

(Source: The Rio Times)

 

[1] INEGI stands for Instituto Nacional de Estadística y Geografía (National Institute of Statistics and Geography).  It's Mexico's official statistics agency, equivalent to the U.S. Census Bureau and Bureau of Labor Statistics rolled into one.