Economics: Credit to the private sector slows despite Banxico's extended easing cycle

MEXICO - Report 09 Dec 2025 by Mauricio González and Francisco González

According to figures published recently by Banxico, financing to the non-financial private sector slowed at an annual rate in the domestic currency component in the third quarter. Within domestic financing, the bank loan portfolio, which represents about 60% of the total, is showing slower growth, mainly in the components of housing and business loans.

This implies that the reductions in Banxico's reference rate that began in early 2024 have not translated into an acceleration of domestic credit, despite this being the goal of such easing, according to policy announcements. Monetary officials point to economic sluggishness and argue the need to reduce the rate as a mechanism to reactivate growth, even though the latter is not part of its mandate.

If core inflation continues to climb next year, Banxico will face major challenges in terms of its effectiveness in anchoring inflation expectations and mitigating a possible depreciation of the exchange rate.

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