Bank of Mexico cites ‘major challenges’ as it cuts rate

The Bank of Mexico
Daniel Hinge

The Bank of Mexico’s governing board voted to cut its policy rate 50 basis points on August 13, citing “major challenges” for monetary policy.

The cut brings the rate to 4.5%. Four of the five board members backed the action, while one preferred a 25bp cut.

The board says in a statement that “timely indicators” point to Mexico making an economic recovery after a sharp contraction in the second quarter of the year. However, they say economic slack is likely to remain elevated and “significant

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