Mexico Keeps Benchmark Rate at 4.5%

As was widely expected, Mexico’s central bank has left its monetary policy rate at 4.5%. The bank says that although the Mexican economy continues to recuperate faster than expected, activity –including private investment, consumption and employment rates– is still below potential. Barclays thinks Banxico’s hawkishness will increase gradually in the coming months as the recovery unfolds. It continues to expect a first rate hike in August. Morgan Stanley predicts the rate will stay on hold until the end of 2010.