Mexico Holds Rates Steady

Mexico’s central bank held its main interest rate steady on Thursday and trimmed its outlook for economic growth this year, as it vowed to maintain a “prudent” policy stance due to risks to inflation, Reuters reported. In its first policy decision since national elections last month, the Bank of Mexico board voted unanimously to leave its benchmark rate unchanged at a more than nine-year high of 7.75%, as expected in a Reuters poll. The bank said risks to growth were tilted downward and that the economy would likely expand between 2% to 2.5% this year, compared to previous guidance of 2% to 3%. “A few months ago, we thought that the growth would be greater,” Central Bank Governor Alejandro Diaz de Leon said on local radio on Thursday evening, adding that “the economic activity is starting to show a weakness that was not anticipated.” The policymakers said in their statement that risks to inflation were still tilted upward “in an environment of high uncertainty.”