Mexico cuts interest rates for 10th straight time

[MEXICO CITY] Mexico's central bank on Thursday reduced its key interest rate for the 10th consecutive time to bolster the slumping economy in the face of the coronavirus pandemic.

The Bank of Mexico cut the inter-bank rate by 50 basis points, to 4.5 per cent, it said in a statement.

Recent data show that "economic activity in Mexico contracted sharply during the second quarter of the year, as the impact of the pandemic intensified," the bank said.

While there were signs of a slight recovery in June as the government began to reopen some sectors, the outlook remained uncertain, it added.

The Mexican economy, the second biggest in Latin America, suffered a record 17.3-per cent contraction in the second quarter of the year from the previous quarter.

Analysts surveyed by the central bank expect the economy to shrink by 10 per cent for the whole of this year, before rebounding by three percent in 2021.

Mexico has registered nearly 55,000 coronavirus deaths - the third-highest toll in the world.

AFP