| | | Mexico Warms Up to 'Global Easing' | | Mexico's central bank cut its key interest rate by 25 basis points last week to 8 percent from a 10-year high. This was the first rate cut in five years and the move has significance for a couple of reasons. | | There was no sign of Mexico cutting rates until July. The Bank of Mexico, known as Banxico, had raised rates 15 times over the past three years because of high inflationary pressures and weakening of the Mexican peso. The central bank's decision to switch gears into monetary easing mode transpired rather suddenly. It was a split 4 – 1 decision, so clearly not a slam dunk either. | | It's a similar story with the U.S. Federal Reserve, where the central bank may have given in to market and political pressures. The financial market started to warm up to the rate-cut idea in July after the Fed turned dovish. Late last month, Mexico's President Andres Manuel Lopez Obrador said that while he respects the central bank's independence, he'd also like to see Mexico cut rates to boost growth. | | Watch the video | | If we can help you with any Foreign Exchange needs, please email foreignexchange@cnb.com or call (800) 447‑4133. | | Want to learn more about international finance, economics, and global events? Sign up for our other Foreign Exchange emails and videos! | | | | | | | Follow City National Bank on social media: | | | | | | Non-deposit investment products: | | • | Are not FDIC insured, | | • | Are not deposits or other obligations of City National Bank and are not guaranteed by City National Bank, and | | • | Are subject to investment risks, including possible loss of the principal invested. | | | | | This report is for general information and education only and was compiled from data and sources believed to be reliable. City National Bank does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors as of the date of the report with no obligation to update or notify of inaccuracy or change. This report is not a recommendation or an offer or solicitation to buy or sell any financial instrument discussed. It is not specific investment advice. Financial instruments discussed may not be suitable for the reader. Readers must make independent investment decisions based on their own investment objectives and financial situations. Prices and financial instruments discussed are subject to change without notice. Instruments denominated in a foreign currency are subject to exchange rate and other risks. City National Bank (and its clients or associated persons) may engage in transactions inconsistent with this report and may buy from or sell to clients or others the financial instruments discussed on a principal basis. Past performance is not an indication of future results. This report may not be reproduced, distributed or further published by any person without the written consent of City National Bank. Please cite source when quoting. | | | | | | |
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