UPDATE 1-Mexico central bank cuts rate out of cycle, unveils financial system liquidity measures
(Adds details about central bank measures)
MEXICO CITY, March 20 (Reuters) – The Mexican central bank on Friday announced a 50 basis points out-of-cycle cut that brought its benchmark interest rate to 6.50%, along with other measures to support financial markets roiled by the coronavirus outbreak.
Banxico, as Mexico’s central bank is known, also said it was cutting the rates on its additional ordinary liquidity facility, and reducing by 50 billion pesos ($2.06 billion) the monetary regulation deposit that private banks must observe.
Banxico, in a statement, added there was heightened uncertainty about the inflation outlook, with risks both on the downside and the upside, along with increased slack in the economy.
At the last monetary policy meeting on Feb. 13, Banxico shaved 25 basis points of its benchmark rate to bring it down to 7.0%. It was its fifth consecutive cut amid sluggish economic growth in 2019, when the economy contracted 0.1%.
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