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Exclusive: Mexico's Carstens says premature to talk of rate cuts before mid-2018

EconomyJul 13, 2017 05:49PM ET
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© Reuters. Mexico Governor Agustin Carstens arrives to an interview with Reuters in Mexico City

MEXICO CITY (Reuters) - The head of Mexico's central bank said on Thursday it was premature to talk about reducing interest rates in the first six to nine months of 2018.

Banco de Mexico Governor Agustin Carstens said in an interview with Reuters that a pause in interest rate increases was likely in the bank's next monetary policy meeting.

Carstens also said the pause in rate hikes may last. But he cautioned that to anticipate that the bank could start reducing rates early next year would be getting too far ahead, and noted that the board had not been discussing that.

Mexico's central bank board raised interest rates a quarter percentage-point to 7.00 percent at last month's meeting, with one member voting to hold them steady.

The central bank has increased its main interest rate in the last seven meetings. Monetary policy is at its tightest since early 2009, and inflation is at a more than an eight-year high.

A majority of the board believes it is crucial the bank takes cues from the U.S. Federal Reserve and maintains its "relative" monetary policy stance with the United States now the U.S. central bank has begun raising rates, minutes of the bank's June 22 meeting showed last week.

Exclusive: Mexico's Carstens says premature to talk of rate cuts before mid-2018

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