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 a statement.
Mexico’s benchmark overnight lending rate immediately dropped 25 basis points to 9.50 percent and yields on Mexico’s 20-year peso-denominated bonds, widely held by foreign investors, were down 18 basis points to 9.35 percent, the lowest rate since April 2004.
The bank had not eased policy since April 2002.
Most analysts had expected the bank to hold rates steady for at least another month, and Mexico’s peso fell 0.5 percent to 10.84 per dollar on the news.
With the first step taken, analysts said they expect the central bank to continue easing monetary policy to push rates down to around 9 percent by the end of the year.
More: today.reuters.com
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.
"The
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
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
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
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 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 1-Mexico 28-day T-bill yield edges down to 7.98 pct
The yield on Mexico's benchmark Cetes, or T-bills, edged down for the 23rd straight week on Tuesday amid investor expectations that the central bank will push interest rates lower again this month.
The rate on 28-day paper fell four basis points to 7.98 percent while the rates on three-month and six-month paper also fell.
An earlier Reuters survey of Cetes dealers had forecast the 28-day Cetes rate would fall two basis points to 8.00 percent while longer-term T-bill yields would fall slightly or hold steady.
The yield on the 10-year peso denominated bond
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.
Senate Pushes Expanded Oil Drilling in Gulf of Mexico
In the 1980s, Senators and Representatives introduced legislation to protect the Gulf of Mexico, to restrict drilling. This Congress plans to expand drilling. This week the Senate quadrupled the Presidents request (map - pdf) for new acreage in the Gulf of Mexico.
Less than two weeks after S. 3711 was introduced, the Senate voted 71-25 to open up an additional 8.3 million acres of east-central Gulf of Mexico to drilling, ostensibly to provide relief for consumers.
However, no new crude will hit the market for 4-5 years -- and when it does,
