Banxico Keeps Rates Steady

As expected, Mexico’s central bank maintained its rate at 4.5% Friday. The bank is expected to maintain rates at this level for the rest of the year. “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,” according to Nomura. Barclays agrees, noting a slightly more hawkish tone from the minutes but says it still believes Mexico will maintain its rate for the rest of the year.