By www.CentralBankNews.info Mexico’s central bank cut its policy rate by another 25 basis points, its third rate cut this year, and said it was considering further rate reductions but wanted to ensure that inflation is not affected by changes to taxes and by U.S. monetary policy.
The Bank of Mexico, which has now cut rates by 100 basis points this year, said the balance of risks to global economic growth were on the downside and there was an absence of pressure on raw materials so global inflation is expected to remain low.
Mexico’s economy slowed sharply in the first quarter and contracted in the second quarter but the central bank said there were signs on “incipient recovery” in the third quarter, showing that some of the adverse impacts from the second half of 20132 were starting to fade.
“While it is anticipated that economic activity will show a recovery in the remainder of this year and next, it is expected that economic growth for 2013 and 2014 is less than the projection published by the Bank of Mexico in its latest inflation report,” the central bank said.
The central bank cut its target for the interbank rate to 3.50 percent following earlier cuts in March and September.
