Mexico Holds Rates

Mexico’s central bank has left the benchmark interest rate unchanged at 4.5%. The bank based its decision on positive signs regarding domestic productivity and inflation, along with a continuing deterioration in the global economy, it says. “With respect to growth, Banxico discounts the fact that domestic aggregate demand has been improving recently,” say analysts at Nomura Securities. “In fact, it describes the balance of risks for growth as worse than before. Clearly, Banxico seems to be focusing on the downward revisions to Europe’s growth outlook, which is headed for a recession, and on the lower forecasts for the US economy by the Fed.”