Mexico Seen Keeping Rate Unchanged

Mexico’s central bank is expected to keep its rate unchanged at 4.50% today. “While the central bank may warn of rising food-related risks to inflation – partly related to the damaged crops caused by freezing weather in early February – the overall tone of [its] statement should continue to show a central bank that is in no hurry to hike,” Morgan Stanley says. The firm believes the rate will stay at 4.50% for the rest of the year. Nomura agrees, saying that “with inflation within the target band of 2%-4% and the output gap expected to be barely positive in H2 2011, we believe Banxico will keep the policy rate unchanged this year.”