Mexico: Banxico leaves interest rates unchanged
July 20, 2012
At its 20 July meeting, the Central Bank (Banxico) left the monetary policy rate unchanged at 4.50%, in a decision that was expected by most market analysts. The Central Bank last adjusted interest rates in July 2009. Banxico stated that economic activity in Mexico continues to register a positive trend despite a further weakening in global growth, amid the persistent Euro area debt crisis and a deceleration in the United States. Nonetheless, the Bank pointed out that against a backdrop of rising global economic headwinds, the overall balance of risks to growth continues to deteriorate. On the inflation side, Banxico commented on the recent rise seen in June and stated that short-term risks are tilted to the upside. However, monetary authorities stressed that they remain confident that, in the medium term, inflation will fall back to levels in line with the Bank's permanent inflation target of 3.0%.