Mexico cenbanker rules out June rate cut, says March cut was premature

BY Reuters | ECONOMIC | 05/17/24 11:12 AM EDT

MEXICO CITY, May 17 (Reuters) -

Bank of Mexico deputy governor Irene Espinosa does not foresee a cut to the benchmark interest rate in June, she told local newspaper El Economista in an interview published on Friday.

Banxico, as Mexico's central bank is known, held the country's key rate earlier this month amid persistent inflation, pushing back the bank's forecast for when inflation will converge to its 3% target from the second quarter of 2025 to the fourth quarter.

Espinosa said she thought the rate cut in March, which lowered Mexico's benchmark rate from 11.25% to 11.00%, was premature and would delay inflation's convergence to target.

"The monetary restriction that was needed to maintain convergence (of inflation to the target) within the horizon that we had planned was reduced," she was quoted as saying. "It basically translated into delaying convergence for two more quarters." (Reporting by Ana Isabel Martinez; Editing by Brendan O'Boyle)

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