Bank of Mexico: Unchanged Benchmark Interest Rate of 4.5%

July 22, 2012

The key Mexican central bank rate has been at 4.5% since a 25-bp cut in July 2009.  375 basis points of easing were implemented overall in the first seven months of 2009 until the authorities were able to detect signs of recovery.  Mexico remains in an expansionary phase of its business cycle.  Officials reaffirmed their policy stance last Friday after the monthly meeting and attributed a CPI spike in June to transitory factors that are unlikely to impact core inflation.  A statement on the web site concludes

The Governing Board considers that the current stance of monetary policy is conducive to the permanent goal of inflation of 3 per cent, so it has decided to maintain unchanged the objective for the interbank interest rate to a day. Looking forward, the Board will remain attentive to the evolution of all the determinants of inflation, since the behavior of these could be advisable to adjust the stance of monetary policy to make it more or less restrictive depending on the scenario that is presented. In any case the convergence of inflation to its permanent goal of 3 percent will be sought at all times.

Copyright 2012, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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