Pena Nieto Growth Malaise Ending Spurs Rate Bets: Mexico Credit

After Mexico’s economy failed to gain much traction during President Enrique Pena Nieto’s first two years in office, growth is finally starting to pick up. That’s prompted traders to predict the first interest-rate increase since 2008.

The odds that Banco de Mexico will lift its benchmark rate in the next year have jumped to 32 percent, from zero two weeks ago, after an Aug. 21 report showed the economy grew faster than analysts’ estimates in the second quarter. The central bank has reduced rates 1.5 percentage points in the past 17 months to 3 percent, the lowest in Latin America.