Mexico: Central Bank leaves rates unchanged and returns to neutral tone
November 30, 2012
At its 30 November meeting, the Central Bank (Banxico) maintained the monetary policy rate at 4.50% in a decision in line with expectations. The Bank has refrained from adjusting interest rates since July 2009. The Bank commented that economic activity continues to expand, albeit at a more moderate pace compared to the previous quarters, owing to softening growth in manufacturing exports. On the monetary front, Banxico highlighted that the recent drop in inflation "has been significant", prompting the Bank to return to a broadly neutral tone, commenting that there are signs that inflation will continue to trend downwards in the months ahead. The Bank expects inflation to end the year "below 4%" and to gradually converge to the permanent inflation target of 3% in 2013.