Banco de México, Mexico’s central bank left its benchmark borrowing rate unchanged at 7% as expected. The vote was unaminous with impacts from recent earthquakes and the inflation risks subsiding.
Banco de México, Mexico’s central bank left its benchmark borrowing rate unchanged at 7% as expected. The vote was unaminous with impacts from recent earthquakes and the inflation risks subsiding. A Reuters poll of 21 analysts surveyed was also unnamoius in expecting unchanged.
Highlights From BdM Announcement
Growth
- Balance of risks to growth have deteriorated particularly because of perception that adverse scenarios in the US – Mexico ties could materialize
- Effects of quake on economy and inflation be temporary and moderate
Inflation
- Balance of risks to inflation may have deteriorated
- Past hikes have begun to have impact on inflation
- Recent earthquakes could cause supply problems and price rises in some products, these would be temporary
- In coming months general inflation seems to have reached its high point, without taking into account quakes
Peso
- Going ahead the board will be vigilant of currency changes and the output gap
- Will also be vigilant of relative monopolistic stance with US as well as impact of quake on prices
Source: Banco de México, Reuters
From The Traders Community News Desk