MEXICO · ECONOMY
Key Facts
- —The country Mexico is a top US trading partner with a floating peso.
- —What happened Annual inflation rose to 3.45% from 3.26%; forecast was 3.47%.
- —Core inflation Core eased to 3.75% from 3.88%; forecast was 3.79%.
- —The rates Banxico holds at 6.50%; the Fed’s range is 3.75% to 4.00%.
- —What it means for you A US dollar buys 6.7% more pesos than on 1 September.
- —Still open Banxico’s next rate decision is due on Thursday, 5 November.
Pricier tomatoes and onions pushed Mexico’s headline rate up again, while the underlying trend kept cooling.
Mexico inflation rose to 3.45% in September from 3.26% in August, the national statistics agency INEGI reported on Thursday, 8 October. Core inflation, which leaves out farm produce, energy and government-set fees, eased to 3.75% from 3.88%.
The figures matter in the United States because they shape Mexico’s interest rates and the peso. Mexico’s central bank is holding rates while the US Federal Reserve has started raising them again.
Tomatoes and Onions Push Mexico Inflation Higher
Both figures came in just under forecasts of 3.47% and 3.79%. INEGI, the National Institute of Statistics and Geography, said consumer prices rose 0.42% from August.
Most of the monthly rise came from the non-core index, which jumped 1.20%. Fruit and vegetable prices climbed 4.40% in September and 8.78% from a year earlier.
Tomatoes rose 30.25% and onions 23.00%, while household LP gas, the bottled fuel many Mexican homes cook with, rose 3.14%. Expansión, a Mexican business outlet, noted that tomatoes and onions alone added 0.20 points, nearly half the monthly rise.
Some prices fell. Potatoes dropped 13.92%, avocados 8.11% and internet, phone and pay-TV bundles 2.06%.
September was the second straight monthly rise in the headline rate, after 3.12% in July. A year earlier, annual inflation stood at 3.76%.
Core Inflation Falls for a Fourth Month
The core rate has now fallen every month since May, when it stood at 4.19%. Core prices rose 0.20% in September alone.
Inside the core index, goods inflation slowed to 3.21% and services inflation to 4.27%. Services remain the sticky part, with restaurant and education costs still rising faster than the headline rate.
Banco de México (Banxico), the autonomous central bank, targets 3% inflation, with a tolerance range of one percentage point either side. On Thursday, 24 September, it said it still expects headline inflation to reach that target in the fourth quarter of 2027.
Banxico Weighs Its Next Move as the Fed Hikes
Banxico’s board voted unanimously on 24 September to hold its overnight rate at 6.50%, a third straight hold. The last cut came in May, and the rate stood at 10.00% at the start of 2025.
The Fed, by contrast, raised its target range by a quarter point in September, to 3.75% to 4.00%. It was the Fed’s first increase since July 2023.
Banxico’s statement said Mexican policy “would not have to react mechanically” to Fed moves, because macroeconomic conditions in the two countries differ. Minutes published on Thursday show three of five board members open to a cut, one calling it a possible one-off.
The other two urged caution, one warning that Banxico may otherwise have to discuss matching Fed hikes. Analysts in Citi’s survey, cited by Expansión, expect the rate to stay at 6.50% through December.
What It Means for You
For US investors, Mexico’s rate sits 2.5 percentage points above the top of the Fed’s range. The minutes show board members weighing how a narrower gap with US rates could affect the peso.
Banxico’s FIX reference rate rose from 16.98 pesos per US dollar on Tuesday, 1 September, to 18.11 on Thursday, 8 October. A dollar therefore buys 6.7% more pesos, though still 1.3% fewer than a year ago.
Banxico lists a trend of peso depreciation among the upside risks to inflation. A weaker peso makes imported goods, including those from the United States, more expensive for Mexican buyers.
For families sending money home, US$100 now converts to about 1,811 pesos at the FIX. Remittances reached US$5.45 billion in August, 3.6% less than a year earlier, Banxico data show.
For lower-income households, a basket of 170 goods and services that tracks minimum living costs rose 3.29% from a year earlier.
Producer prices, published separately on the same day, rose 4.05% from a year earlier. That is a cost signal for US companies that buy goods made in Mexico.
What Is Not Known
INEGI does not explain why tomato and onion prices jumped, so it is unclear whether the spike will reverse in October. The forecasts of 3.47% and 3.79% are analyst consensus figures; Citi’s survey, cited by Expansión, had 3.46% and 3.78%.
The minutes do not name the board members who are open to a cut, and none committed to a date. It is also unknown how much of the peso’s recent slide will pass through to prices.
What Comes Next
The Fed meets on 27 and 28 October, and Banxico decides on Thursday, 5 November, at 1 p.m. Mexico City time. INEGI publishes October inflation on Monday, 9 November.
One higher reading does not mean inflation is out of control. The headline rate has stayed within Banxico’s tolerance range since May, and the core rate keeps easing.
Frequently Asked Questions
What was Mexico’s inflation rate in September 2026?
Annual inflation was 3.45% in September, up from 3.26% in August, according to INEGI. Prices rose 0.42% in the month.
What is core inflation, and why did it fall?
Core inflation excludes farm produce, energy and government-set fees, so it shows the underlying trend. It eased to 3.75% as goods and services inflation both slowed.
Why did headline inflation rise?
Fresh food drove it. Tomatoes rose 30.25% and onions 23.00% in September, together adding nearly half of the monthly increase.
Will Banxico cut interest rates in November?
Three of five Banxico board members are open to a cut from 6.50%. Analysts surveyed by Citi expect no change this year.
How does this affect Americans?
Mexican inflation and interest rates move the peso, which affects US exports, investments and the value of remittances. A dollar currently buys about 18.11 pesos at Banxico’s reference rate.
Sources: INEGI, INPC bulletin 619/26, September 2026; INEGI, INPC bulletin 586/26, August 2026; INEGI, INPC bulletin, July 2026; Banco de México, monetary policy statement, 24 September 2026; Banco de México, minutes of the 24 September meeting; Banco de México, 2026 decision calendar; Banco de México, SIE table CF102 (FIX exchange rate); Banco de México, SIE table CE81 (remittances); US Federal Reserve, open market operations; Expansión (all accessed 9 October 2026).
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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