Mexico Holds Key Interest Rate, Sees Inflation Easing Over Longer Term Muhammad Iqbal - Business Recorder
go to original September 6, 2014

MEXICO CITY - Mexico's central bank kept interest rates on hold on Friday, highlighting stronger economic growth and forecasting that inflation pressures would ease in the first half of 2015, boding for steady borrowing costs ahead.

The Banco de Mexico maintained its benchmark interest rate at a record low of 3 percent, as expected by analysts polled by Reuters, after policymakers surprised markets by delivering a 50 basis point cut in June.

Growth wobbled early this year, as a harsh US winter hammered American demand for Mexican factory exports and a tax hike dragged on consumer spending.

But data last month showed second-quarter growth beat expectations thanks to a pick up in industrial activity and domestic demand, bolstering bets that economic expansion could reach the finance ministry's 2.7 percent growth forecast for 2014.

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