Mexico central bank cuts interest rate for 1st time since 2014
Published on: Saturday, August 17, 2019
By: AFP
MEXICO CITY: Mexico’s central bank cut its benchmark interest rate Thursday for the first time since 2014, citing a global economic slowdown and trade tensions between the United States and the rest of the world.The bank’s governors voted to cut the one-day interbank lending rate by a quarter-point, to eight per cent, it said in a statement.ADVERTISEMENT
The move from the normally hawkish central bank comes after Latin America’s second-largest economy flirted dangerously with recession, shrinking 0.2 per cent in the first quarter of the year and growing just 0.1 per cent in the second.
“In a context of marked uncertainty, the balance of risks to (Mexico’s) growth remains negative,” the bank said.
It cited numerous factors exerting drag on the economy, including “a slowdown in the main advanced and emerging economies,” “tensions between the United States and other economies in matters of trade, migration, technology and exchange-rate policy,” and a “disorderly exit by Britain from the European Union.”Stay up-to-date by following Daily Express’s Telegram channel.
Daily Express Malaysia
With Mexico’s inflation rate at 3.78 per cent – within the bank’s target range of three per cent plus or minus one percentage point – the bank decided there was room to cut interest rates and give the economy a boost. All but one of the bank’s five board members voted in favour of the cut, it said.ADVERTISEMENT
The move will come as good news to leftist President Andres Manuel Lopez Obrador, who took office in December and is struggling to kick-start the sluggish economy. – AFP