Mexico: Central bank cuts key interest rate by 50bps, MXN steady

• The Bank of Banxico moved forwards its monetary policy meeting and cut rates. 
• One member voted against the decision for a smaller cut. 

“Banco de México’s Governing Board has decided to move forward its monetary policy decision from the 26th to the 20th of March and to lower by 50 basis points the target for the overnight interbank interest rate to 6.5%, as well as to adopt other measures to provide liquidity and improve the functioning of domestic financial markets”, said Banxico in a statement. 

“Considering the risks for inflation, economic activity and financial markets implied by the COVID-19 pandemic, significant challenges arise for monetary policy and for the economy in general. In light of the foreseen implications, with the presence of all its members, Banco de México’s Governing Board decided by majority to lower the target for the overnight interbank interest rate by 50 basis points to 6.5%. One member voted for lowering the target to 6.75%.”

The Mexican peso remained steady following the announcement. USD/MXN was holding to weekly gains hovering around 24.20, about to post the highest daily close on record.