LatinNews Daily - 14 August 2020

*Mexico’s central bank (Banxico) has reduced its benchmark interest rate by 50 basis points to 4.5%. This is the fifth consecutive cut in the interest rate announced by Banxico in as many months, as it seeks to ensure there is sufficient liquidity in the domestic market amid the coronavirus (Covid-19) pandemic. A Banxico statement said its governing board voted to reduce the interest rate to ensure there is enough credit available for those that need it and after considering that the inflationary risks remain low given the slowdown in economic activity. Mexico’s national inflation rate rose from 3.33% in June to 3.52% in July, taking it further above Banxico’s 3% target. However, Banxico’s view is that inflation will not rise much higher in the rest of 2020.

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