By Alexandra Alper and Michael O'Boyle
MEXICO CITY Nov 8 Mexico's central bankers were
unanimous in their decision to lower interest rates last month
to counter an economic slowdown while all agreed that growth had
picked up and that further cuts would not be needed.
Board members voted 5-0 to cut their benchmark rate
by 25 basis points to a record low of 3.50 percent,
the second cut in two months, after Latin America's no. 2
economy contracted in the second quarter for the first time in
But central bankers also agreed in their decision to
communicate that no further cuts were advisable, since the
central bank expects growth to pick up next year.
"All members agreed that there are signs of a nascent
recovery," the minutes said. A majority agreed that downside
risks to the economy persisted, but said the threat had faded
since early September.
Mexico's economy is seen growing just over 1.2 percent,
according to the most recent poll from the central bank, down
sharply from a 3.8 percent rate in 2012.
The majority of board members agreed the risks to inflation
had improved. Inflation cooled in October to 3.36 percent, its
lowest since January, as pressure on fresh food prices faded.
All members of the board agreed that Mexico's tax overhaul
is likely to have only a transitory impact on inflation.
The central bank said in its quarterly inflation report this
week that higher taxes will drive inflation about 40 basis
points higher next year to around 3.5 percent next year.