Bank of Mexico Reduces Benchmark Rate By 75 Bps to 6.0%

April 17, 2009

Mexico’s central bank engineered its fourth rate cut of 2009, matching the expected 75-basis point size.  Prior cuts amounted to 75 bps on March 20, 25 bps on February 27, and 50 bps on January 16th.  Central bank officials again reacted to weaker-than-anticipated growth and despite on-year CPI inflation of 6.0%, implying a zero real central bank rate.  Officials released a statement that indicated new and lower growth forecasts would be announced within a few weeks. GDP contracted at a 10.3% annualized rate in the final quarter of 2008, and the consensus of private forecasts for growth in 2009 hovers around negative 2.5%.

Copyright 2009 Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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