Mexico Signals Forthcoming Cut After Keeping Rate Unchanged

Mexico kept borrowing costs at a record high for a fifth straight meeting Thursday, as robust economic growth has stoked concern about above-target inflation, while hinting a cut is on the table in the next few months by changing its forward guidance.

Banxico, as the central bank is known, held its key interest rate at 11.25%, matching the forecasts of all 28 economists in a Bloomberg survey and leaving it at the highest level since it started targeting inflation in 2008. The bank also said it will hold the rate at its current level “for some time,” dropping a more hawkish reference used in the previous four meetings about maintaining it for an “extended period” of time. In addition, it acknowledged that progress on the disinflation process “has been made.”