Economics
Mexico Holds Key Rate in Surprise Pause to Easing Cycle
- Policy makers vote to hold key interest rate at 4.25%
- Inflation has remained above target for three straight months
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Mexico’s central bank surprised markets by halting a record monetary easing cycle that has lent one of the few supports to an economy expected to contract nearly 10% this year.
Banco de Mexico, led by Governor Alejandro Diaz de Leon, voted 4-1 to hold borrowing costs at 4.25%, after inflation held above the bank’s target ceiling for three straight months. The Mexican peso briefly trimmed losses after the decision, which was expected by only six of 22 economists surveyed by Bloomberg. Sixteen of them forecast a quarter-point cut.