MEXICO CITY: Mexico's central bank is expected to hold its benchmark interest rate steady next Friday at a record low to support a sluggish recovery while arguing that a recent spike in inflation will continue to cool.
Nineteen of 20 analysts surveyed by Reuters expect the central bank to hold its main interest rate at 3.00 percent on Dec. 5 while one analyst expected a 25 basis point cut after weaker-than-expected growth in the third quarter. Policymakers held the rate steady at July, September and October meetings after catching markets off guard with a 50 basis points cut in June to aid a weak economy.
Mexico's annual inflation rate eased in early November to 4.16 percent, cooling after a spike above the central bank's 4 percent tolerance ceiling. Policymakers said this month they expect the rate to cool to near 3 percent by mid-2015.
The central bank this month cut its growth outlook for this year to between 2.0-2.5 percent compared to their previous forecast for an expansion between 2.0-2.8 percent.
The central bank will issue its policy statement at 9:00 local time [1500 GMT] next Friday.
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