Mexico’s Fifth Central Bank Rate Cut Since Last August

February 13, 2020

The Governing Board of the Mexico has just reduced its overnight interbank interest rate to a 3-year low of 7.0% from 7.25%. Four prior cuts in 2019 were made in August, September, November and December — each by 25 basis points as well. That reverses half of 250 basis points of tightening in 2017-2018. A released statement observes stagnant domestic activity and notes that GDP is likely to expand more slowly this year than assumed previously and that growth risks are biased downward. CPI inflation picked up in January but is considered manageable. Measure of expected inflation are stable, and such is likely to exceed 3.0% ahead but just slightly.

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