Mexico's Central Bank Eyes Potential Rate Cuts Amid Economic Slowdown

Deputy Governor Jonathan Heath of Mexico's central bank suggests further room to cut interest rates as the economy slows. Recent cuts to the benchmark rate were driven by stagnant economic indicators and trade-related uncertainties. Despite potential risks, inflation is not expected to rise significantly.

Mexico's central bank may further reduce its benchmark interest rate if the economy continues to slow, according to Deputy Governor Jonathan Heath. Speaking on a Banorte podcast, Heath emphasized the need to respond to stagnating economic indicators and global trade uncertainties.

Last month, the Bank of Mexico lowered its interest rate to 9% in a unanimous decision. With the expectation of an economic slowdown in both Mexico and the United States, the bank sees room to adopt a less restrictive monetary policy.

Despite concerns surrounding U.S. tariffs, Heath indicated that Mexico's inflationary pressures remain manageable. Nonetheless, he advised caution in future policy decisions during the latter half of the year.

(With inputs from agencies.)