MNI BRIEF: Banxico Cuts Rate By 25BP On 3-2 Vote

MNI (BRASILIA) - Mexico's central bank reduced its overnight interbank interest rate by 25 basis points to 10.75% Thursday, citing expectations that core inflation will continue to fall. The vote was 3-2 with deputy governors Irene Espinosa and Jonathan Heath dissenting in favor of holding rates.

"Although the outlook for inflation still calls for a restrictive monetary policy stance, its evolution implies that it is adequate to reduce the level of monetary restriction," the bank said in a statement. "Looking ahead, the Board foresees that the inflationary environment may allow for discussing reference rate adjustments."

Banxico kept borrowing costs steady for two consecutive meetings after making a single 25 basis point cut in March. (See MNI BANXICO WATCH: Decision Likely to Split On Hold Or Cut)