Mexico’s Interbank Funding Rate Left at 3.0%

January 29, 2015

The Bank of Mexico’s benchmark interest rate has been 3.0% since a 50-basis point cut last June, which was the fourth reduction totaling 150 bps between March 2013 and then.  A released statement after the first monetary policy committee meeting of 2015 reads similarly to the prior meeting’s statement, concluding

The Governing Council has decided to keep in 3 percent goal for the interbank interest rate to a day, in virtue of which estimated that the monetary stance remains consistent with the efficient convergence of inflation to the target of 3 percent. However, it will remain attentive to the evolution of all the determinants of inflation and expectations for horizons of medium and long term. In particular, monitor the relative monetary stance between Mexico and United States, the performance of the exchange rate and its possible impact on inflation, as well as the evolution of the degree of slack in the economy before the expected recovery. All this in order to be able to take the necessary measures to ensure the convergence of the inflation target of 3 percent in 2015 and consolidate it.

Mexican consumer prices climbed 4.1% between December 2013 and December 2014, while GDP grew about 2% last year.  The current account deficit is running close to 2% of GDP.

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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