Mexico: Banxico maintains policy stance
March 16, 2012
At its 16 March meeting, the Central Bank (Banxico) voted to leave the monetary policy rate unchanged at 4.50%. The decision was anticipated by most market analysts, as Banxico has refrained from adjusting interest rates since July 2009 and recent developments did not portend a change to its current stance. The Bank highlighted that economic activity has proven to be resilient, despite the moderation in external demand witnessed in the second half of 2011. According to the Bank, the overall balance of risks to growth turned more positive this month, mainly reflecting the improving growth scenario in the United States, as well as the diminishing threat of a major worldwide financial collapse. Nevertheless, Banxico also warned that the recent increase in oil prices, arising from tensions in the Middle East, could impact adversely on global growth and inflation. Finally, Banxico stated that inflation expectations remain well anchored and that, on balance, it perceives inflationary pressures to have evolved positively. The next monetary policy meeting is scheduled for 27 April.