Mexico Cuts Benchmark Rate Again

Following a reduction only last month of 0.25 percentage points, Mexico again cut the overnight lending rate, this time to 9.25% from 9.50%. The interest rate cut had been widely expected by analysts. Now that inflation is under control, the government is looking to boost the economy after a long run of interest rate hikes were used to slow growth over the past 18 months. Overnight rates rose from a low of 4% in August 2003 to a high of 9.75% in May this year. The government has forecast economic growth of 3.5% this year, down from the 4.4% seen last year.