No Change in Mexican Monetary Policy Interest Rate

May 29, 2011

The key Mexican interbank interest rate was left at 4.5% by Bank of Mexico policymakers, who met on Friday.  This rate was cut several times by 375 basis points in all during 2009 but has been at 4.5% since the last of those reductions in July of that year.  A statement on the Bank of Mexico web site observes a more moderate pace of global growth and positive Mexican growth but a slower rate of reduction in the country‚Äôs output gap.  GDP will probably expand about 5% this year and 3% in 2012.  Total CPI inflation was lifted recently by commodity prices, but core inflation has been below the 3% target since January.  The rise of unit labor costs has been trending lower.  As officials have noted in previous statements, expected inflation, the output gap, grain and other commodity prices and various determining inflation factors will continue to be monitored. A rate hike seems unlikely before autumn.

Copyright Larry Greenberg 2011.  All rights reserved.  No secondary distribution without express permission.

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