POLL-Mexico's central bank likely to cut key interest rate next week

MEXICO CITY, Oct 31 (Reuters) - Mexico's central bank is likely to again cut its benchmark interest rate next week amid slowing inflation and a weak economy, a Reuters poll showed on Friday.

According to the survey, 24 of 25 economic analysts expect the country's financial authority to lower the interest rate by 25 basis points to 7.25%, marking its 12th reduction since it began a cycle of easing in early 2024.

A single analyst surveyed believes the bank will likely maintain the rate at its current 7.5%, its lowest level since 2022. MXCBIR=ECI

The Bank of Mexico, which will make its penultimate monetary policy announcement of the year on November 6, stated at its most recent meeting that it would continue to assess the implementation of reductions, although it did not offer details on the magnitude of adjustments.

DEPUTY GOVERNOR HAS OPPOSED CUTS

Deputy Governor Jonathan Heath, who has opposed the governing board's recent rate-cutting decisions, said in mid-October that Banxico should not rush to aggressively lower interest rates until it is certain that inflation is resuming a clear downward trend.

The latest data shows Mexico's annual inflation rate fell more than expected in the first half of October, although core inflation remained above the official target of 3%. The Mexican economy contracted in the third quarter.

The 25-basis-point rate cut carried out by the U.S. Federal Reserve this week is seen as another factor that would support a further decrease in the cost of borrowing by Banxico.

Of the 20 analysts who responded to an additional question about the central bank's next step after this month's measure, 19 agreed on a likely additional 25-basis-point reduction in its next announcement on December 18, which would bring the rate to a year-end rate of 7%.