Mexican Monetary Policy on Hold
November 30, 2009
Mexican monetary authorities left their key benchmark interest steady at 4.5% after Friday’s monthly policy meeting. The result was expected. The key rate has been at its present level since a cut of 25 basis points announced on July 17th. That had been the seventh straight cut, the sum of which totaled 375 basis points from a peak of 8.25% at the end of 2008. There was one other 25-bp reduction in February, two cuts of 50 bps in January and June, and three cuts of 75 bps each in March, April, and May. Mexico’s recession ended in the second quarter. In 3Q, real GDP rose 2.9%, which trimmed the on-year contraction to 6.2% from 6.9% in 2Q. CPI inflation of 4.5% in the year to October matched the central bank interest rate and was only 1.3 percentage points less than in the prior statement year to October 2008, but officials expect such to trend lower. The key rate is unlikely to get raised within the next six months.
Copyright Larry Greenberg 2009. All rights reserved. No secondary distribution without express permission.
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