Mexico City, (Reuters).-Banxico reduced its key interest rate for the fourth consecutive occasion and said that it will continue to assess additional cuts taking into account the effects of all determinants of inflation.
The decision of the five members of the Governing Board, which was divided, led the objective of the interbank interest rate to 8%, its lowest level from 2022, in line with market projections.
Banxico explained that the Governor, Victoria Rodríguez, and subgovernors Galia Borja, José Gabriel Cuadra and Omar Mejía, voted in favor of the decision, while her colleague Jonathan Heath did it in favor of maintaining the reference rate at 8.50%.
Lee: Inflation is moderated in Mexico in the first half of June
The Central Bank raised to 3.7%, from a previous 3.3%, its forecast for general inflation at the end of the year and rose to 3.6% from the previous 3.4% its estimated for the underlying index.
He argued that the reduction of the inflation of the services has been more gradual, and that the increase in that of the goods has been greater than expected.
Even so, he kept intact his perspective that inflation converges to the official goal of 3% plus/less a percentage point in the third quarter of next year.
The General Consumer Price Index decelerated in the first half of June to be in 4.51% at the year -on -year rate, compared to 4.62% of the second half of May.
As for economic activity, Banxico said that while it has expanded moderately, it continues to face “slack conditions” in the face of the weakness that has been showing.
“The uncertainty and commercial tensions environment implies significant downward risks,” he said.
The second largest economy in Latin America dodged a dreaded technical recession in the first quarter of the year, however it grew just 0.2% in the midst of an internal activity that walks slowly and the uncertainty related to the tariff policies of the United States.
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