💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

Mexican central bank seen cutting rates 50 basis points: Reuters poll

Published 06/22/2020, 12:01 PM
Updated 06/22/2020, 12:05 PM
© Reuters. FILE PHOTO: The logo of Mexico's Central Bank (Banco de Mexico) is seen at its building in downtown Mexico City

MEXICO CITY (Reuters) - Mexico's central bank will likely cut its key interest rate again later this week to alleviate the impact of the coronavirus pandemic on the economy, while inflation remains contained, a Reuters poll showed Monday.

Some 26 of 27 analysts predicted the Bank of Mexico's board would cut the benchmark interest rate by 50 basis points to 5.00% when it meets for its next monetary policy meeting on Thursday. One forecast a cut of 25 points.

Reducing the rate to 5.00% would take it to the lowest level since September 2016 and mark a ninth consecutive cut.

By the end of 2020, the median forecast of analysts was for the key rate to be 4.50%. That was below a year-end prediction for 4.75% made in the previous monetary policy survey in May.

Mexico entered a recession in 2019 and the economy is expected to shrink by up to 10% or more this year. Industrial output suffered a record contraction in April, declining by more than 25% compared to the previous month.

Further bolstering the case for a rate cut is the fact inflation remains below the central bank's 3% target. In May, the rate picked up less than forecast to 2.84%.

© Reuters. FILE PHOTO: The logo of Mexico's Central Bank (Banco de Mexico) is seen at its building in downtown Mexico City

The central bank is due to publish its latest monetary policy decision on Thursday at 1300 local time (1800 GMT).

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.