Mexico: Banxico maintains current stance in line with expectations
July 8, 2012
At its 8 June 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 continues to register a positive trend, underpinned by solid manufacturing exports. Nevertheless, the Bank warned that the overall balance of risks to growth has turned more negative, reflecting a deceleration in the global economy, amid the recent escalation of the Euro area debt crisis and signals of softer growth in the United States as well as in emerging market economies. Regarding price developments, monetary authorities maintained that inflation expectations remain well anchored and that the overall balance of risks to inflation was broadly unchanged, despite the recent currency depreciation. However, the Bank stressed that it remains ready to adjust its policy stance to more or less restrictive depending on the development of inflation determinants.