Mexico central bank launches surprise interest rate hike

Global Business

As Latin America’s second-largest economy slows, Mexico’s central bank is stepping in to keep things going with a surprise interest rate hike.

The oil-rich nation is struggling under the weight of collapsing crude prices. The government hopes a multi-pronged approach to propping up the economy will keep it from falling any further.

CCTV America’s Franc Contreras reports from Mexico City.

Mexico central bank launches surprise interest rate hike

As Latin America's second-largest economy slows, Mexico's central bank is stepping in to keep things going with a surprise interest rate hike. The oil-rich nation is struggling under the weight of collapsing crude prices. The government hopes a multi-pronged approach to propping up the economy will keep it from falling any further. CCTV America's Franc Contreras reports from Mexico City. Amid a shaky global economic outlook, economic decision-makers around the world are taking measures to fend-off declines. Collapsing world oil prices are the main cause of Mexico's economic slow-down that's seen the Mexican peso decline sharply against the U.S. dollar, hitting an all-time low in early February. To prevent further declines, Mexico's Finance Minister announced $7 billion in cuts from the federal budget. Mexico's central bank also raised its benchmark lending rate by 50 basis points, to 3.75 percent. Real estate agent Diana Alva says the downturn is especially evident in rising transportation costs and a weakening job market. Independent economist Jonathan Heath says the government's measures might actually slow the Mexican economy a bit more, but he said they are designed to maintain consumers' purchasing power. Heath said Mexico's central bank and finance minister have learned from past mistakes. They now know that stabilizing the country's macro economy is the best way to shield Mexicans from global economic volatility.

Amid a shaky global economic outlook, economic decision-makers around the world are taking measures to fend-off declines.

Collapsing world oil prices are the main cause of Mexico’s economic slow-down that’s seen the Mexican peso decline sharply against the U.S. dollar, hitting an all-time low in early February.

To prevent further declines, Mexico’s Finance Minister announced $7 billion in cuts from the federal budget. Mexico’s central bank also raised its benchmark lending rate by 50 basis points, to 3.75 percent.

Real estate agent Diana Alva says the downturn is especially evident in rising transportation costs and a weakening job market.

Independent economist Jonathan Heath says the government’s measures might actually slow the Mexican economy a bit more, but he said they are designed to maintain consumers’ purchasing power.

Heath said Mexico’s central bank and finance minister have learned from past mistakes. They now know that stabilizing the country’s macro economy is the best way to shield Mexicans from global economic volatility.