Bank of Mexico Rate Cut

February 12, 2021

Following two monetary policy reviews in which the Bank of Mexico’s easing trend was put on hold, officials there cut their overnight interbank lending rate by 25 basis points to 4.0%. This move had been expected. A released statement notes that Mexican real GDP plunged 8.5% in 2020, which for now is considered a greater problem than inflation, which at 3.5% is above the 3% target. Risks still lie to the downside, and the pandemic continues to roll on. Between February and September last year, officials had cut their interest rate from 7.25% to 4.25%, and today’s additional 25-basis point reduction was decided unanimously.

Copyright 2021, Larry Greenberg. All rights reserved. No secondary distribution without express permission.


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