Mexico's central bank divided over its decision in July to hold rates steady, with only one member arguing that a pre-emptive hike before the US Federal Reserve acts would help ease uncertainty that has hit financial markets. Central Bank board members voted 3 to 1 at their July 30 meeting to hold their benchmark rate at a record low of 3.0 percent, minutes showed on Thursday. Board member Manuel Ramos Francia was not present for the decision.
The majority said the economy was still weak, while inflation expectations had not been hurt by deep losses in the peso, and agreed to hold rates steady. But the sole member to vote in favour of a quarter-point hike said that a "preventive" move was convenient, given imminent rate action by the Fed. Some members said a hike before the Fed could be justified if Mexican financial stability was threatened by a mass sell-off of peso bonds by foreign investors.
Mexico's peso has been hammered to record lows this year by concerns that higher US borrowing costs will drive investors to dump emerging market assets. The central bank on Wednesday revised down its growth target for this year to between 1.7 and 2.5 percent, from 2 to 3 percent, on weak exports and a slump in domestic oil output.