Mexico’s central bank on Friday held its benchmark rate at 4 per cent – brushing off concerns that the economy could be losing steam.
Growth in industrial output has slowed and retail sales dropped in February by the most in more than three years. On the other hand, capital has flooded in, the peso has surged by 6 per cent this year and inflation hit 4.7 per cent early this month, though Agustín Carstens, the central bank governor, believes it will drop to not much more than 3 per cent by the end of the year. Continue reading »
Not a whole bucket of cold water, but at least a splash or two was administered on Friday to cool growing expectations on the near future of Mexico’s economy.
Most, but by no means all, analysts were surprised by a central bank decision to reduce its benchmark interest rate by half a percentage point to its lowest ever, 4 per cent. The cut was the first since 2009. Continue reading »
The new year is supposed to bring new things and so it was with Mexico’s central bank, which surprised analysts on Friday by saying that it could cut interest rates in the coming months in a scenario of lower growth and inflation, which it is now suggesting could be the case. Continue reading »
There are at least two conclusions to draw from Mexico’s inflation, which edged up to 4.34 per cent over the past 12 months to June compared with 3.85 per cent to May.
The first is that in spite of the increase – June was the second consecutive month that overall prices went up – things still look to be well under control. The second is that the latest data suggest that the central bank will continue to keep interest rates on hold at 4.5 per cent. Continue reading »
The sense of uncertainty in the global economy is palpable, and rightly so. China is slowing – no one is sure by how much; Europe’s sovereign debt crisis is going from bad to worse – but no one knows how much worse it will get; and the US is still just muddling through.
So what’s a central banker in Latin America to do? Judging by the raft of rates decisions and minutes out this week – many of the region’s policy makers are happy taking the wait-and-see approach. Continue reading »