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POLL-Mexican central bank seen cutting key rate to 4.25%

Credit: REUTERS/DANIEL BECERRIL

Mexico's central bank is seen slowing the pace of cuts to its benchmark interest rate at a monetary policy announcement this week, a Reuters poll showed on Monday, possibly signaling that a pause to the loosening cycle is on the horizon.

By the end of 2020, the rate is seen at 4.00%, according to the median of the projections, suggesting Banxico will cut another 25 basis points in one of the two monetary policy announcements scheduled for November and December.

According to the median projection, rates will remain at 4% in 2021.

Mexico's year-on-year inflation accelerated in August above the central bank's target and to its highest level in 15 months.

Banxico estimated at the end of last month that the Mexican economy could fall by as much as 12.8% in 2020, affected by restrictions in place to limit the coronavirus pandemic.

The bank will publish its monetary policy statement on Thursday at 1:00 p.m. (1800 GMT).

(Reporting by Miguel Angel Gutierrez in Mexico City and Gabriel Burín in Buenos Aires; Writing by Frank Jack Daniel; editing by Philippa Fletcher)

((miguel.gutierrez@thomsonreuters.com; +5255 5282 7144; Mesa de edición en español +562 2 4374400. Twitter: @ReutersLatam))

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