MEXICO CITY, Feb 20 (Reuters) - The Bank of Mexico said on Thursday that it might continue cutting the benchmark interest rate at future monetary policy meetings and could "consider adjusting it in similar magnitudes" to the latest 50 basis point reduction.
Banxico, as the Mexican central bank is known, lowered its key rate by half a percentage point to 9.50% in a decision announced on February 6, as inflation cools and after the economy contracted slightly late last year.
One of Banxico's five board members said that considering the progress made on disinflation "a similar reference rate cut could be considered at the next monetary policy meeting," according to minutes of the February policy meeting.
Banxico will announce its next monetary policy decision on March 27.
The February rate cut was double the 25-basis-point reductions Banxico had implemented since it began lowering borrowing costs from a record high of 11.25% in March 2024.
The minutes also highlighted concerns about the economy. Banxico noted that Mexico's economy weakened in the fourth quarter of 2024, with most board members observing a contraction in GDP compared to the prior quarter.
The central bank pointed to ongoing global uncertainty, particularly the potential impact of policy changes from the new U.S. administration. This has contributed to weaker-than-expected growth projections, which could continue to put downward pressure on inflation.
Banxico emphasized the need to stay focused on measures that support inflation convergence, with some members cautioning that uncertainty surrounding trade policies could cloud judgment and lead to hasty decisions.
Reporting by Natalia Siniawski; Editing by Anthony Esposito and Andrea Ricci
Source: Reuters