English

Banxico cuts interbank rate as the coronavirus crisis deepens

Mexico's central bank cut the benchmark rate by 50 basis points

Banxico is Mexico's central bank - Photo: Mario Guzmán/EFE
22/04/2020 |12:01
Leonor Flores
reportera de la sección CarteraVer perfil

For the second time in a row, has operated out of the schedule to cut the benchmark rate by 50 basis points to reach 6% .

“Considering the risks derived from the for inflation, the economic activity and the financial markets are facing important challenges for the monetary policy and in general,” as explained by Banxico in a statement.

Mexico’s central bank said that given the forecast impact, it unanimously decided, with the presence of all of its members, to decrease by 50 basis points the objective for interbank rate to 6%.

Newsletter
Recibe en tu correo las noticias más destacadas para viajar, trabajar y vivir en EU

Recommended:

Moreover, Banxico decided to implement to promote an orderly behavior of financial markets, strengthen the credit lines, and promote liquidity for the healthy development of the financial system .

Banxico warned that the impact over the national economy caused by the pandemic will lead to an important in the country during the first semester of 2020.

Recommended:

It established that the size and span of the effects derived from the pandemic are still unknown since the available information is still limited, however, initial projections suggest that GDP in the first semester of 2020 could shrink over 5% compared to the same period in 2019.

“Hence, it is clear that slack conditions are significantly increasing in a context in which the balance of risks for growth has a downward bias ,” Banxico said.

Recommended:

mp