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In a surprise decision today, Mexico’s central bank, Banxico, announced that ÅŸt lowered its benchmark interest rate by 25 basis points to 8% from 8.25%.  With the initial reaction, the USD/MXN rose to a daily high of 19,7615.  

The bank said that the decision was not unanimous. Below are some key takeaways from the policy statement, as reported by Reuters.

“One board member voted to keep rate at 8.25%.”

Balance of risks for growth is still tilted downwards in an environment of marked uncertainty.”

“Upwards risks to inflation include that Mexico’s peso comes under pressure from internal and external factors.”

“Risks to inflation also include threat of US  tariffs.”

“Inflation expectations have remained relatively stable, though above 3%.”

“It’s important to deal with the deterioration in credit rating of Mexico government and of Pemex.”