Bank of Mexico Remains on Hold
June 11, 2012
Mexico’s key interest rate has been at 4.5% since July 2009 and will remain at that level for the time being. Policymakers met last Friday and reaffirmed that the current stance is promoting the medium-term inflation target of 3% while protecting the recovery amid an uncertain global environment. The central bank authorities revised their forecast for GDP growth in 2012 upward by 0.25% to a range of 3.25%-4.25%. Inflation this year will be at or somewhat above 3%. Risks to the growth forecast have deteriorated, but price risks are unchanged. Expected inflation is well-anchored despite a near-10% peso slide between mid-March and mid-May. There is some slack in the economy, but such should get trimmed.
Copyright 2012, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Mexican monetary policy
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