UPDATE 1-Mexico central bank holds interest rates steady
Mexico’s central bank held interest rates steady on Friday, although it is widely expected to push them lower again later this month to help a soft economy.
The central bank said in its twice-monthly policy review it was keeping its money market “short” unchanged at 79 million pesos a day and made no change to the country’s overnight lending rate, which stands at 9.00 percent.
The short regulates overnight lending levels and was the central bank’s main monetary policy weapon before it recently began explicitly telling markets how much rates should move.
With inflation under control and manufacturing output weak, the central bank began pushing rates lower in August and has since cut the overnight rate by three-quarters of a percentage point.
Mexico’s 12-month inflation fell to a record low of 3.05 percent at the end of October, giving the central bank even more room to cut rates.
A Reuters poll earlier this week showed the bank was widely expected to hold steady on Friday and instead move again at its next meeting on Nov. 25, when most analysts predict it will cut the overnight rate to 8.75 percent.
More: today.reuters.com
UPDATE 2-Mexico central bank holds interest rates steady
Mexico's central bank held interest rates steady on Friday, although it is widely expected to push them lower later this month to help a struggling economy.
With manufacturing output weak, the central bank began pushing rates lower in August and markets expect further cuts ahead, but analysts differ over whether policy-makers will pause in the easing cycle as the race for July 2006 elections heats up.
The bank said in its twice-monthly policy review on Friday it was keeping its money market "short" steady at 79 million pesos a day and made no change
UPDATE 1-Mexico's central bank holds monetary policy steady
Mexico's central bank held monetary policy steady on Friday, pausing in its current loosening cycle as expected, despite record low inflation and a weak economy.
The central bank said in its twice-monthly policy review it was keeping its money market "short" steady at 79 million pesos a day. The short is one of the Banco de Mexico's main monetary policy tools.
A decrease in the short increases overnight lending to banks and tends to push interest rates lower, which encourages borrowing to stimulate economic growth.
At its last policy review on Aug. 26, Mexico's central
UPDATE 4-Mexico holds rates steady, sees inflation easing
Mexico's central bank on Friday said it expects inflation to drop inside its target range this year, but refused to ease monetary policy for now and insisted that interest rates should remain high.
The central bank board said after its twice-monthly policy meeting it was keeping its money market "short" steady at 79 million pesos a day. An increase in the short reduces overnight lending to banks and tends to push interest rates higher.
Although the bank said it sees inflation falling inside the target range of 2 percent to 4 percent this year, it
UPDATE 1-Mexico 28-day T-bill yield falls to 9.36 pct
The yield on Mexico's benchmark 28-day Cetes, or T-bills, shed 6 basis points to 9.36 percent on Tuesday, as investors bet the central bank will push down its key interest rate over the next few months.
Longer-term rates also fell at the central bank auction.
The decline in short-term interest rates was slightly bigger than market expectations. A Reuters survey of Cetes dealers had forecast the rate on the benchmark one-month paper would edge down 3 basis points to 9.39 percent.
Following signs of a strong improvement in inflation, Mexico's central bank pushed interest rates
UPDATE 4-Mexico pushes rates lower in historic move
Mexico's central bank pushed interest rates lower on Friday for the first time in over three years to give the soft economy a boost, now that inflation is under control.
It was the first time the bank has explicitly told markets where it wants interest rates to go, and analysts said it was a major step toward a U.S.-style reference rate system.
"Considering the balance of risks versus inflation, the central bank has decided to allow a relaxation of domestic monetary conditions of no more than 25 basis points," the central bank said in
UPDATE 1-Mexico 28-day T-bills edge lower to 9.60 pct
The yield on Mexico's benchmark 28-day Cetes, or T-bills, edged one basis point lower to 9.60 percent on Tuesday as investors expect the central bank to hold monetary policy steady at a policy meeting this week.
Longer-term rates moved lower, reflecting growing expectations that interest rates could come down in coming weeks.
T-bill rates have drifted slightly lower in recent weeks as the inflation fears eased and the central bank set an informal reference rate in the secondary market.
Mexico's central bank is due to hold its twice-monthly monetary policy review on Friday and most
UPDATE 2-Mexico central bank pushes interest rates lower
Mexico's central bank on Friday pushed interest rates 25 basis points lower for the second straight month to revive a tepid economy.
The bank said it would allow the overnight lending rate, which has held at around 9.50 percent for the last month, to fall a quarter of a percentage point. The move was widely expected as inflation has come under control in recent months.
After a long period of tightening monetary policy to bring inflation down, the central bank changed tack last month and began pushing rates lower to help the struggling economy.
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Mexico cenbank eases rates by 25 basis points
Mexico's central bank pushed interest rates 25 basis points lower for a fourth straight month on Friday to fan a weak economy.
With inflation under control, the central bank said it would allow the overnight lending rate to fall to 8.75 percent. The move had been widely expected.
The bank held its money market steady at 79 million pesos per day. The bank controlled monetary policy through changes to the short before it began pushing rates down directly.
After a long period of tightening monetary policy to bring inflation down, the central bank changed direction
Mexico 28-day T-bill yield down to 8.42 pct
The yield on Mexico's benchmark 28-day Cetes, or T-bills, shed 8 basis points to 8.42 percent on Tuesday on expectations the central bank will push interest rates lower this week.
Longer-term rates also fell at the central bank auction.
The fall in interest rates was slightly smaller than market expectations. A Reuters survey of Cetes dealers had forecast the rate on the benchmark one-month paper would drop 10 basis points to 8.40 percent.
The yield on the 10-year peso denominated bond fell to 8.45 percent from 8.73 percent when it was last auctioned on Nov.
OECD says Mexico could eventually move to direct setting of rates, drop 'corto'
The Mexican central bank could eventually drop the 'corto' mechanism and switch to a system of directly setting interest rates, the OECD said in a report on the Mexican economy.
The Bank of Mexico currently influences market interest rates through the 'corto' instrument, under which it sets a target for the amount held by banks in accounts at the central bank.
An increase in this target drains liquidity from the money market and pushes short-term interest rates higher, while an increase in the 'corto' target produces the
