Mexico central bank holds interest rates steady

Mexico left bank lending rates at a 6-1/2-year low on Friday to boost the still weak economy but policymakers said factory exports were growing quickly and consumer spending showed signs of improvement. The central bank said it was leaving its target for overnight bank lending at 4.5 percent, as was widely expected.
Mexico is limping back from a deep recession that was caused by a plunge in US demand for its exports during the global financial crisis. While exports have rebounded, consumer spending remains depressed, holding back the recovery. "Manufacturing exports have been reflecting dynamic US industrial activity," the central bank said in its monthly policy statement. "Private consumption and investment are still lagging, although recently they have showed some improvement," it said. Mexican consumer prices fell for three straight months through June but the bank said recent price drops were largely due to seasonal factors.