MEXICO CITY (Reuters) – The Bank of Mexico lowered its benchmark interest rate to 9.00% on Thursday amid cooling inflation and uncertainty relating to trade tensions and the country’s weakening economy.
The unanimous 50 basis point cut, which was expected by analysts polled by Reuters, was the second consecutive reduction of that magnitude after the board sped up its rate-cutting pace at its February meeting.
In a statement announcing the decision, the Mexican monetary authority said it could consider cutting the rate by a similar magnitude at future meetings.
Inflation in Latin America’s no. 2 economy has cooled within the bank’s target range of 3%, plus or minus a percentage point. Data days before the policy meeting showing that headline inflation eased to 3.67% on an annual basis in the first half of March, down from 3.74% in the previous month.
However, the bank’s five-member governing board warned changes in economic policy in the United States, Mexico’s top trading partner, have added uncertainty to its economic forecasts.
“Its effects could imply inflationary pressures on both sides of the balance,” the bank said.
(Reporting by Brendan O’Boyle; Editing by Anthony Esposito)
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