Bank of Mexico Cuts Overnight Interbank Rate Again

September 27, 2019

Late yesterday came news that the Bank of Mexico had reduced its overnight interbank rate by 25 basis points for a second straight month.  The rate level now becomes 7.75%. These moves reverse 100 basis points of policy tightening in 2018, and more cuts seem likely soon. According to a released statement, five of seven policymakers voted for the reduction, while the other two favored a cut of 50 basis points. Inflation has nudged marginally below the 3% target, and weak economic growth is causing excess capacity to climb. Officials also were influenced by Mexican and global yield curve developments.

Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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