Further cuts in the central bank rate are unlikely, judging by the minutes of the bank’s June 6 board meeting. Directors voted 3-2 at that meeting to reduce the key interest rate by half a point to a record low three per cent, surprising economist, analysts and other banks.
But there was little support among board members for any future cuts, according to the minutes, which were released yesterday.
Inflation, meanwhile, was 3.51% in May, down from an eight-month high of 4.48% in January, which has been attributed to the waning of the effect of new taxes introduced in January. The value-added sales tax along the U.S. border and in some coastal areas was increased to 16%, putting it on a par with the rest of the country.
Mexico is targeting an inflation rate of three per cent, but the target has been achieved in only one month since January 2010.