August 16, 2019 / 1:47 PM / a month ago

Interest rate cut will stimulate Mexican economy: president

FILE PHOTO: Mexico's President Andres Manuel Lopez Obrador attends a news conference at the National Palace in Mexico City, Mexico July 22, 2019. REUTERS/Edgard Garrido/File Photo

MEXICO CITY (Reuters) - Mexican President Andres Manuel Lopez Obrador said on Friday that while Mexico faced a difficult economic environment, this week’s interest rate cut would stimulate Latin America’s second-largest economy.

The Bank of Mexico cut its key lending rate on Thursday for the first time since June 2014, citing slow inflation and increasing slack in the economy, a decision that fueled expectations that further monetary easing could be on the way.

“This is important because it stimulates growth,” Lopez Obrador said of the decision during his regular morning conference, adding that he respected the autonomy of the central bank.

Lopez Obrador also reiterated that the Mexican economy was doing well and faced neither inflation nor currency problems.

In a majority decision, the central bank’s five-member board voted to lower the overnight interbank rate by 25 basis points to 8.00% although one board member voted to maintain the rate at 8.25%.

Reporting by Stefanie Eschenbacher and Miguel Angel Lopez; Editing by Chizu Nomiyama and Bill Trott

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