Photo: The Rio TimesPhoto: The Rio TimesMexico
Banxico cuts benchmark rate to 6.25% in surprise move
The unexpected cut to a four-year low raises questions for borrowers, investors and the peso as inflation picks up, with the governor calling it a one-time step.
What happened
Mexico's central bank, Banxico, cut its benchmark interest rate by 25 basis points to 6.25% this month. Bloomberg+1 The move caught most analysts off guard, as the economic calendar had pointed to no change. Bloomberg+1 The cut brought borrowing costs to a four-year low even as inflation accelerated. Bloomberg Central Bank Governor Victoria Rodríguez said in an interview that the cut was a one-time move rather than the start of an extended easing cycle. Bloomberg Rodríguez said inflation remains within the bank's tolerance range and the move will not hinder efforts to rein in consumer price rises. Bloomberg
Around it
A Citi survey of Mexican analysts taken on 20 October had predicted caution from the bank. Ground News Mexico's main stock index, the S&P/BMV IPC, rose 0.30% to 71,033, its highest close in at least six months. Ground News The peso weakened against the dollar, which rose 0.73% to 18.73 pesos. Ground News
Sources
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