Mexico Keeps Rate at Record Low as Growth Wobbles Fast FT
go to original June 4, 2015

Mexico held interest rates steady at a record low on Thursday as a tame inflation outlook allowed policymakers to focus on boosting growth.

The decision by Banxico, the Mexican central bank, to keep rates unchanged at 3 per cent was expected by all 29 economists surveyed by Bloomberg.

The decision to leave rates unchanged for the eight consecutive time comes as Mexico battles to light up its sputtering economy.

Although the country, a major oil producer, has weathered the collapse in crude prices better than many of its peers thanks to a robust export manufacturing sector, growth has been hurt by the more tepid than expected recovery in the US.

Both the government and the central cut their growth forecast for for this year last month after the economy grew at a meagre 0.4 per cent pace during the first quarter.

The finance ministry now expects Latin America's second largest economy to expand between 2.2 and 3.2 per cent this year, compared to its previous forecast of between 3.2 and 4.2 per cent.

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