Bank of Mexico Cuts Rates for Fourth Time in a Row since August

• The central bank lowered the overnight interest-rate target for the fourth consecutive time since August by 0.25 percentage point to 7.25%, bringing borrowing costs to their lowest level since 2017.

 

• This is in an effort to foster an environment of confidence and certainty for investment as well as increase productivity which will in turn spur economic growth.

 

• The lowered interest rate narrowed the spread between Mexican and U.S. rates, since the Federal Reserve kept rates steady at its meeting earlier this month. Most analysts bet the easing cycle in Mexico will continue in the coming months at a moderate pace.

 

• The consensus sees the interest rate at 6.5% by the end of next year, according to a recent survey among private economists.

(Source: Wall Street Journal)