* First split interest rate decision on record
* One member argued inflation still a risk
* Board leaves open door to further easing if growth slows
MEXICO CITY, March 22 Mexico's central bankers
disagreed on their move to cut interest rates to a record low,
minutes of their March discussions showed, marking their first
divided rate decision since the bank began publishing minutes
two years ago.
Banco de Mexico cut interest rates two weeks ago for the
first time in nearly four years, taking borrowing costs to a new
record low of 4.0 percent as policymakers bet they are winning
the battle against inflation in Latin America's second-largest
But the minutes, released on Friday, showed that one of the
five members voted to keep rates on hold, arguing that recent
data did not prove the case that inflation had been tamed, as
the majority said.
The minutes also left open the door to a possible further
easing in monetary policy down the track, should growth slow
more than expected.
"The majority clarified that while the interest rate cut was
a one-off, (the board) at all times will evaluate the most
adequate monetary policy for the economic environment," the
The cut was a bold move by the central bank as inflation has
begun to quicken and consumer prices are expected to climb
further in the coming months.
Before the meeting, central bank board member Manuel Sanchez
had said a rate cut would be premature, arguing that both the
downward trend in inflation and inflation expectations had yet
to be confirmed.
The Banco de Mexico, as Mexico's central bank is called, had
left rates unchanged since mid-2009, when Mexico was mired in a
Although U.S. demand for manufactured goods supported growth
last year, most policymakers saw a weak global environment and
expressed concern about a slow recovery north of the border, the
destination for almost 80 percent of Mexico's exports.
Most board members said the domestic economy had begun to
show signs of slowing, reflecting weaker momentum in the global
economy, which had also affected internal demand.
Mexico has forecast growth of 3.5 percent this year, down
from 3.9 percent in 2012.