Banco de Mexico keeps interbank one-day overnight interest rate at 4½%

By Richard Connell

New York, Sept. 18 - The Board of Governors of the Banco de Mexico left its interbank one-day overnight interest rate at 4½% at its meeting on Friday, according to a news release issued by the bank.

The board pointed at recent data which showed that global economic activity has been in a state of recovery, aided by the stimulus packages instituted by many major economies.

The board noted that in Mexico the contraction was severe in the first half of 2009, due to the fact that the economy of Mexico is highly dependent on other countries, particularly the United States.

The board did predict a better second half, looking at improved indicators including industrial production, employment and consumer confidence.

Annual inflation has declined as projected in line with the last two forecasts and is expected to remain at around 4% for the medium term.

The board decided to hold the interest rate at 4½% with the aim of achieving the inflation target of 3%.

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