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Mexico unexpectedly cuts interest rate

Friday, June 6, 2014

Mexico's central bank surprisingly slashed interest rates to a record low on Friday, arguing slack in the economy gave it room for a one-off cut to spur growth without fanning inflation pressures.

The Banco de Mexico cut its benchmark interest rate by 50 basis points to 3 percent.

Policymakers said they did not expect to further cut rates, suggesting even lower borrowing costs would not be prudent since the U.S. is expected to begin a tightening cycle and growth is forecast to pick up in Mexico.

Source: Reuters