Bank of Mexico lowers key interest rate to 10.25%

MEXICO CITY (Reuters) – The Bank of Mexico lowered its benchmark interest rate by 25 basis points to 10.25% in a unanimous decision, it said on Thursday, its third consecutive rate cut as core inflation in Latin America’s second-largest economy continues to ease.

Analysts polled by Reuters had overwhelmingly forecast the 25-basis-point cut, which comes a week after the U.S. Federal Reserve cut borrowing costs by a similar 25 basis points.

In a statement announcing its decision, Banxico, as the central bank is known, noted that the inflation outlook has improved while the closely watched core inflation rate, considered a good indicator for price trends, is expected to keep decreasing.

In October, core inflation, which excludes volatile energy and food prices, slowed to 3.80% in the 12 months through October, down from 3.91% in September.

Mexico’s annual headline inflation rate in October, however, ticked up last month to 4.76% from the September figure of 4.58%.

Banxico targets headline inflation at 3%, plus or minus one percentage point.