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Economy & Business - October 2020

ECONOMIC HIGHLIGHTS

Interest rate cuts: On 24 September Mexico’s central bank (Banxico) reduced its benchmark interest rate by 25 basis points to 4.25%. This is the sixth 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 in the context of the coronavirus (Covid-19) pandemic. According to a Banxico statement, the unanimous decision taken by the bank’s board of directors is an attempt to address the challenges stemming from the pandemic for monetary policy, such as the impact on economic activity, the financial shock, and its effects on inflation. According to the statement, annual general inflation increased from 3.62% to 4.10% between July and the first two weeks in September and is expected to close this year above Banxico's 3% target.

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