Mexico central bank wary of slow growth

April 07, 2014 - 1:57:10 am
Mexico’s Central Bank Governor Agustin Carstens.

MEXICO CITY: Most of Mexico’s central bankers think that a spike in inflation has likely passed, while the majority said short-term risks to growth would push them to cut their growth outlook, minutes released on Friday showed.

Central Bank board members voted at their March 31 meeting to hold their benchmark interest rate at a record low of 3.50 percent. The minutes did not specify if the decision was unanimous or not, a rare omission for the bank. The central bank later issued a statement clarifying that the decision was unanimous.

Most policymakers said that the risks of higher inflation had receded marginally, while the majority thought the bank would have to revise down its current growth outlook of between 3 percent and 4 percent for 2014.

“The majority of board members thought that the balance of risks to growth had deteriorated, on the margin,” the minutes said, with most board members adding that recent economic reforms improved the medium-term growth outlook.

Analysts expect the bank will hold borrowing costs steady this year as the economy recovers from a weak start to 2014. “The minutes confirm that the economic environment does not suggest an imminent change in monetary policy,” Barclays analyst Marco Oviedo said MEXICO CITY: Most of Mexico’s central bankers think that a spike in inflation has likely passed, while the majority said short-term risks to growth would push them to cut their growth outlook, minutes released on Friday showed.

Central Bank board members voted at their March 31 meeting to hold their benchmark interest rate at a record low of 3.50 percent. The minutes did not specify if the decision was unanimous or not, a rare omission for the bank. The central bank later issued a statement clarifying that the decision was unanimous.

Most policymakers said that the risks of higher inflation had receded marginally, while the majority thought the bank would have to revise down its current growth outlook of between 3 percent and 4 percent for 2014.

“The majority of board members thought that the balance of risks to growth had deteriorated, on the margin,” the minutes said, with most board members adding that recent economic reforms improved the medium-term growth outlook.

Analysts expect the bank will hold borrowing costs steady this year as the economy recovers from a weak start to 2014. “The minutes confirm that the economic environment does not suggest an imminent change in monetary policy,” Barclays analyst Marco Oviedo said in a report. Reutersin a report. Reuters

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