Banxico Independence Questioned as Mexico Waits Until Late 2027 for 3% Inflation
ANALYSIS · MEXICO
Key Facts
- —The country Mexico, Latin America’s second-largest economy. Its central bank, Banco de México (Banxico), has been constitutionally autonomous since 1994 and targets 3 percent annual inflation.
- —What happened On 30 September 2026, former Banxico deputy governor Manuel Sánchez González wrote in El Financiero that the bank has missed its 3 percent target for 75 consecutive months.
- —The numbers Headline inflation was 3.42 percent and core 3.79 percent in the first half of September (INEGI, cited by Banxico, 24 September). The policy rate is 6.50 percent.
- —What it means for you Borrowing costs in pesos are likely to stay high while inflation sits above target. Savers still earn roughly three points above inflation at current rates.
- —Still open Whether Banxico moves on 5 November, and whether the minutes due 8 October show any board member questioning the pace of disinflation.
Banxico independence and credibility came under fresh attack on Wednesday 30 September from a former insider. Manuel Sánchez González, a Banxico deputy governor from 2009 to 2016, says the bank has failed its core mandate for six years.
His column in the Mexican daily El Financiero is opinion, not a ruling. It lands a week after the bank held at 6.50 percent and vowed not to track the US Federal Reserve mechanically.
What the former deputy governor argues
The constitution tells Banxico to keep the peso’s purchasing power stable. Since 2003 the bank has read that as a 3 percent annual inflation target, Sánchez González writes.
By his count, inflation has sat above 3 percent every month since June 2020, averaging 5.2 percent. That makes 75 consecutive months of missing the target through August 2026.
He also takes aim at the band of one point either side of the target. Many analysts now call it the “target range”, which he says confuses the public and breeds complacency.
Even by that looser yardstick, he counts 54 months above 4 percent in the same period. These counts are his own calculations and have not been independently recalculated.
What Banxico itself says
The bank’s own statement of 24 September gives a calmer picture. Headline inflation rose from 3.10 to 3.42 percent between early July and early September, driven by volatile items.
Core inflation, which strips out fresh food and energy, kept falling, from 3.95 to 3.79 percent. The data come from INEGI, the national statistics institute.
Banxico still expects headline inflation to reach 3 percent only in the fourth quarter of 2027. It says the balance of risks to that path is tilted upwards.
The board voted unanimously to hold, citing slack in the economy and the absence of demand pressure. It also noted that expectations for end-2026 inflation had come down.
The Fed question and Banxico independence
The September statement, he notes, dropped the forward guidance the board had given since June 2024. Sánchez González calls that openness healthy in principle, but reads it as a reaction to the Fed’s quarter-point rise.
He questions the bank’s line that Mexico and the United States sit at different stages of the cycle. In his view, both recoveries began together in the second half of 2020.
Governor Victoria Rodríguez Ceja defended that same reasoning in an interview published on 29 September. Her case is set out in Banxico governor says Mexico need not follow the Fed.
Where the two sides differ
The critic’s sharpest point concerns services. He says core services inflation has averaged 4.6 percent over two years, possibly lifted by steep minimum-wage rises.
That, he argues, contradicts Banxico’s view that Mexico faces no demand pressure. He also notes that analysts’ inflation expectations sit above 3 percent at every horizon.
Banxico’s statement partly concedes that last point, saying longer-term expectations remain stable above the target. Its defence is that core inflation is falling and policy is already restrictive.
For background on the decision itself, see Banxico holds rates at 6.5% and splits from the Fed.
What Is Not Yet Known
It is not known whether other board members share the critic’s concerns. The minutes of the September meeting, due on 8 October, may show how the vote was argued.
The next rate decision is on 5 November, with the quarterly report on 26 November. Whether the 2027 date holds depends on services prices and the peso, and will shape the Banxico independence debate.
Sources: El Financiero, “El prolongado incumplimiento del Banxico”, Manuel Sánchez González, 30 September 2026; Banco de México, monetary policy statement, 24 September 2026 (INEGI inflation data); Banco de México, 2026 calendar of policy decisions and minutes.
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