MEXICO CITY (Reuters) -The Bank of Mexico cut its benchmark interest rate by 25 basis points to 7.50% on Thursday, in line with market expectations, as it seeks to spur a sluggish economy struggling with sticky inflation and on-again, off-again tariffs from the U.S.
The decision by the central bank's five-member governing board was not unanimous, the bank said in a statement announcing the decision, with deputy governor Jonathan Heath voting again to hold the rate at its previous 7.75% level.
Thursday's
statement held prior guidance that the board will consider further cuts at future meetings.
Banxico is balancing dual challenges: bringing down inflation while also stimulating the economy amid tepid economic growth. Easing monetary policy could spur the economy but also fuel inflation in Latin America’s second largest economy.
Data released Wednesday by Mexico's statistics agency showed that annual headline inflation rose in the first half of September to 3.74%, up from 3.49% in the first half of August.
The closely watched core price index, which strips out volatile food and energy prices, ticked up to 4.26% from 4.21%.
Banxico targets an inflation rate of 3%, plus or minus a percentage point.
In updated inflation forecasts released on Thursday, Banxico raised its estimate for year-end annual core inflation. It now sees it hitting an average of 4.0% in the fourth quarter, up from its previous estimate of 3.7%.
(Reporting by Brendan O'Boyle; Editing by Emily Green)
