Bank of Mexico lowers interest rate to 7.25%, cites concerns

MEXICO CITY – Mexico’s central bank lowered its benchmark interest rate by a quarter-point from 7.5% to 7.25%. on Thursday, citing a sluggish global economy and continued weakness for the country’s own outlook.

The Bank of Mexico said in a statement that Mexico has seen recent positive activity, such as a stronger peso, in part as a result of the agreement on the USMCA trade pact poised to replace the North American Free Trade Agreement with the United States and Canada.

But it said uncertainty remains about things such as debt ratings for the country and state oil company Pemex.

“While the information available for the fourth quarter of 2019 is limited, it is estimated that the weakness (Mexican) economic activity has been recording for several quarters will persist,” the bank said in a statement.

“In an environment of marked uncertainty,” it continued, “the balance of risks for growth continues slanting downward.”

The first three quarters under Mexican President Andrés Manuel López Obrador, who took office in December 2018, were marked by GDP growth around zero.