Last Update: 05/07/2021
Since 1994, Mexico’s central bank, Banco de México (Banxico) has been autonomous in defining and implementing the county’s monetary policy. Monetary policy decisions taken by Banco de México are aimed on guaranteeing the purchase power of the Mexican peso, based on inflation control and exchange rate monitoring.
The monetary policy implemented by Banco de México has created favorable conditions for sustained economic growth, reaching stable and significantly low inflation levels. According to INEGI, as of July 2021 the inflation rate is 5.81%. According to the Banco de México estimates, it is forseen that during 2021 inflation will maintain its downward trend, to annual levels of 2.7%.
Likewise, as of August 2021, Mexico has accumulated international reserves of over USD 193 billion, which allows it to face the volatility of the international environment.
 Banco de México.
Furthermore, the International Monetary Fund, has acknowledged the Mexican economy soundness, and in November 2020 ratified the flexible credit line extended to Mexico of USD 61 billion.
As a consequence, México has funds of over USD 254 billion to face any volatile environment with more strength.
Banco de México carries out its monetary policy by establishing a target rate for one day bank lending transactions. The conditions under which Banco de México provides or withdraws such liquidity ensures the compliance with the objective established for one day interbank lending rate.