Banco de México's board decided to lower the benchmark interest rate by 25 basis points to 8.00% as the country faces lower inflation and slower economic growth.
One board member voted to keep the rate at 8.25%.
Slower economic activity continued in the second quarter of 2019, resulting in further slack, the central bank said. Headline inflation fell to 3.78% from 3.95% between June and July, while core inflation remained at around 3.8%.
Meanwhile, the central bank said the balance of risks for the world economy has eroded amid increased geopolitical risks, as seen in the U.S.-China trade disputes, as well as low inflation levels in advanced economies leading to more accommodative monetary policies, such as an interest rate cut from the U.S. Federal Reserve.
Inflation expectations have remained stable, although at levels above 3%, the central bank said.
This is the first time the central bank has cut its rate in over five years.