MEXICO CITY – Mexico’s central bank left its benchmark interest rate unchanged yesterday after more than a year of cuts, as rising inflation limited its scope to stimulate the pandemic-hit economy.
The Bank of Mexico held the interbank rate at 4.25%, it said in a statement, following 11 straight reductions stretching back to August last year to boost Latin America’s second-largest economy.
It said the decision was aimed at guiding inflation back towards its target of around 3%, after hitting 4.09% in October.
Although economic activity rebounded in the third quarter of the year, it “remains below pre-pandemic levels in an environment of uncertainty and downside risks”, said the bank.
The decision was not unanimous – one of the five members of the governing board voted to lower the interest rate to 4%, it said.
Mexico’s gross domestic product rebounded 12% in the July-September period from the previous quarter after the country relaxed coronavirus-control restrictions, according to a preliminary estimate.
The economy suffered a record 18.7% plunge in the second quarter from a year earlier after the nation was semi-paralysed by lockdown measures.
Mexico has registered more than 96,000 Covid-19 deaths – one of the world’s highest tolls. – AFP, November 13, 2020
