Mexico: End to Cuts Signaled

Mexican central bankers dropped from their monthly policy statement a sentence saying the country’s interest rates should follow rising US rates, which some interpret as a signal they’re done raising rates after 12 increases in 14 months. The central bank has raised its benchmark lending rate to 9.75 percent to drive inflation down to its 3 percent annual target. Inflation in May was 4.6 percent. Expectations of lower interest rates have increased demand for Mexico’s fixed-rate bonds; the yield on Mexico’s peso-denominated note due in 2014 has been below the overnight lending rate since June 8.