Banco de Mexico board of governors keeps overnight interest rate at 3%

New York, Jan. 29 – The board of governors of Banco de Mexico decided to keep the bank’s overnight interbank interest rate at 3%, according to a news release Thursday.

The governors noted that inflation continues to decline as do future expectations, reflecting the drop in the price of oil, the appreciation of the dollar, and the lack of pressure from labor costs.

Overall the global economy remains weak, with forecasts being reduced for this year and next, although there are variations between countries.

Mexico’s peso has been among the currencies depreciating against the dollar and has been particularly sensitive to the fall in the price of oil, reflecting concerns about the country’s fiscal situation and its current account, the board said in its statement.

In Mexico, economic activity is showing a moderate recovery, but the labor market and economy in general remain slack. Consequently demand is not expected to put pressure on prices.

The bank continues to anticipate that underlying inflation will remain below 3% throughout this year.

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