MEXICO CITY — The board of Mexico’s Central Bank (Banxico) decided not to change the interbank interest rate, which is 3.75 percent.
In a press release, the board justified their decision, saying that the inflation risks balance is not increasing. They also noted that Mexico’s growth rate for the first quarter of 2016 was higher than the previous quarter, despite declines in external demand and gross-fixed investment, which they attribute to dynamic private consumption.
The board also observed positive trends in the service sector at the expense of industry, which they interpret as demonstrating generalized affluence.
Although they forecast that inflation will top their goal of 3 percent in the last few months of 2016, the annual average will remain close to 3 percent. The Banxico board attributes the success in controlling inflation rates to the policies of the Secretariat of the Treasury (SHCP) of establishing maximum prices for gasoline and anticipating international changes in petroleum prices.
Unlike the local inflation risks balance, which has not increased, the international situation is more complicated, with declining global growth rates, inconsistent monetary policies in different countries and a decline in trade. Also, although oil prices have recovered, oversupply in the oil market continues.
The decision by the board comes a week after the United States Federal Reserve announced that it would not change interest rates.