Mexico's central bank announced on Thursday it would slash the key interest rate by 50 basis points to 4.5 percent, the fifth such cut this year
MEXICO CITY (Pakistan Point News / Sputnik - 14th August, 2020) Mexico's central bank announced on Thursday it would slash the key interest rate by 50 basis points to 4.5 percent, the fifth such cut this year.
"Banco de Mexico's Governing Board decided by majority to lower the target for the overnight interbank interest rate by 50 basis points to a level of 4.5%," a press release read.
In a sign of discord, one board member voted for cutting the rate to 4.75 percent. The bank said further available room for maneuver depended on the outlook for inflation, among other factors.
Mexico's economy contracted during the second quarter as the negative impact of the pandemic intensified. There was an uptick in economic activity in June, although an "environment of uncertainty" prevailed, the bank said.
Gerardo Esquivel, the central bank's deputy governor, predicted that the economy would shrink 8.5-10.5 percent this year. A return to pre-crisis levels of domestic industrial output is not expected before 2022.