Prices up but Mexico lowers interest rate

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Prices up but Mexico lowers interest rate
Photo: Marco Ugarte/AP/TT

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Mexico's central bank is acting unorthodox and lowering the interest rate despite increased consumer prices and inflation. The interest rate is being lowered by 25 basis points to 10.75 percent. Analysts are divided on whether it was the right or unwise decision.

The core inflation has decreased over the past 18 months, while fresh data suggests that food and energy prices are increasing.

The bank sees a risk of weaker growth with an unchanged interest rate. And there is concern about the economy in the USA, the country's largest trading partner.

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By TTEnglish edition by Sweden Herald, adapted for local and international readers

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