Mexico, Colombia and Chile Rates: Banxico to BCCh — 2026-09-28
Banxico held its benchmark rate at 6.50% for a third straight meeting on September 24, explicitly rejecting pressure to follow the Fed's recent hike, while the peso slid to 17.68 per dollar — its worst week since March. In Colombia, the Banco de la República heads into this week's meeting with rates expected to stay at 12%, as Bank of America upgrades the country's external sovereign debt to overweight. Chilean bond traders are keeping their eyes on the Federal Reserve as the main driver, with BCCh's operator survey pointing to 4.5% held through the end of October and beyond. <!-- headline --> Peso slides to 17.68 as Banxico refuses to follow the Fed higher <!-- /headline -->
Mexico, Colombia and Chile Rates: Banxico to BCCh — 2026-09-28
Banxico held its benchmark rate at 6.50% for a third straight meeting on September 24, explicitly rejecting pressure to follow the Fed's recent hike, while the peso slid to 17.68 per dollar — its worst week since March. In Colombia, the Banco de la República heads into this week's meeting with rates expected to stay at 12%, as Bank of America upgrades the country's external sovereign debt to overweight. Chilean bond traders are keeping their eyes on the Federal Reserve as the main driver, with BCCh's operator survey pointing to 4.5% held through the end of October and beyond.
Top developments
Banxico holds at 6.50%, breaks from the Fed
On September 24, Banxico kept its key rate unchanged at 6.50% for a third consecutive meeting, voting unanimously and stating it does not "have to react" to the United States, even after the Fed raised rates to 3.75–4.00%. Policymakers said conditions awaited clear evidence inflation is cooling to target before any move. The decision marks a stark policy divergence with Washington that reshapes the peso carry equation.
Peso has its worst week since March
The peso slipped toward its worst weekly loss since March after the rate decision, closing Friday at 17.6760 per dollar — roughly 5% weaker than early September — and hit 17.68 at the Friday close per Milenio. On September 23 it had its worst day against the dollar in six months, among the top three depreciating currencies globally, as Banxico's "cautela" unnerved traders. Shrinking rate differentials against the Fed are the key drag cited by analysts.
Bank of America goes overweight Colombia external bonds
Bank of America raised Colombia's external sovereign debt to overweight, citing a spending-led fiscal adjustment, lower deficits including a 3.1% primary deficit, and attractive yields. The call comes ahead of BanRep's meeting this week and adds international buy-side endorsement to TES and bond appetite despite inflation pressures.
BanRep expected to hold at 12% this week
BanRep's board decides rates this week in a difficult environment of inflation pressure and earthquake-related financing needs, with analysts expecting stability at 12%. Local coverage notes inflation pressures run counter to weak consumption and growth, keeping the policy rate on hold. The policy rate has stood at 12% since July 1; the latest DANE reading showed inflation at 6.24% annually.
Chilean bond traders focus on the Fed, not BCCh
A Bloomberg survey of 19 Chilean analysts and traders found 11 said the Federal Reserve will be the main driver of Chilean markets. BCCh's own operator survey, released last week, shows the board expected to hold the TPM at 4.5% at its end-of-month meeting and leave it there for two years, with consumer prices seen rising 0.5%. Experts note that with US hikes already delivered and at least two more priced, downward pressure on the Chilean peso could add inflationary impulse.
Local view
Mexican financial press is striking a cautious tone on the peso: Expansión reports the peso is "trapped between the Fed and record US debt," warning that rate adjustments in the US and Japan threaten to unwind positions that favor the peso — the market has not yet shown widespread bearish bets, but there is significant de-risking of exposure. El Financiero highlights that the narrowing Fed–Banxico rate differential will continue weighing on the exchange rate. In Colombia, El Nuevo Siglo reports markets expect BanRep will not cut this month, given inflation pressures against weak demand and growth. The Economex newsletter questions whether Mexico's rate-cutting cycle is over, noting oil above $100, rising global rates and peso depreciation blocking further cuts.
Context & numbers
- Banxico policy rate: 6.50%, held unanimously on September 24, the third straight hold.
- USD/MXN: 17.6760 at Friday close, about 5% weaker than early September; Fed funds at 3.75–4.00% after the recent hike.
- Spillover snapshot a week after the Fed hike: Mexico's peso at 17.72, Colombia's at 3,287, Brazil's real at 5.19.
- Colombia: BanRep rate at 12% since July 1; DANE inflation at 6.24%; peso firmed ~1.1% to 3,312 on Friday, September 25 while the COLCAP fell 0.95% to 2,585.
- Chile: TPM at 4.5%; the September IPoM has been published by BCCh.
On the radar
- BanRep's rate decision this week — analysts have a clear consensus for a 12% hold, but watch the vote split and commentary on earthquake-related financing needs.
- BCCh's end-of-month meeting: operators expect 4.5% held, with a two-year plateau signal.
- Upcoming week: Bloomberg Línea flags new economic data from Mexico, Brazil, Chile, Colombia and Peru, plus US employment, inflation and activity releases that will drive LatAm rates sentiment.
- Banxico minutes from the September decision are due in roughly two weeks per its publication calendar — watch for dissents on the hold.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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