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Economy & Business - January 2020

Economic Highlights

Interest rate cut: On 19 December 2019 Mexico’s central bank (Banxico) cut its benchmark interest rate by 25 basis points to 7.25%, the fourth cut in interest rates in 2019. The decision was not unanimous; one member of Banxico’s monetoary policy board wanted it cut to 7.0%. As well as the domestic economic slowdown, Banxico’s report cited reduced headline inflation which closed at 2.97% in November 2019, just below Banxico’s target of 3% as one of the factors that led to the slashing of the interest rate. The report also highlighted concerns that the recent increase in the minimum wage could drive up inflation.

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