June 25, 2019 / 4:37 PM / a month ago

Mexico's central bank expected to hold interest rate at 8.25%: Reuters poll

FILE PHOTO: The logo of Mexico's Central Bank (Banco de Mexico) is seen at its building in downtown Mexico City, Mexico February 28, 2019. REUTERS/Daniel Becerril/File Photo

MEXICO CITY (Reuters) - Mexico’s central bank is expected to hold its benchmark interest rate steady at 8.25% on Thursday, according to a Reuters poll, after annual inflation slowed this month more than expected, despite signs of weakness in the economy.

The Bank of Mexico’s (Banxico) decision will follow last week’s move by the U.S. Federal Reserve to maintain its benchmark rate, while saying cuts could begin as early as July.

Banxico is forecast to hold the key lending rate at 8.25%, the level it has maintained since Dec. 20, according to all 16 analysts and economists consulted by Reuters.

Mexico’s economic activity increased slightly in April compared to the previous month, while gross domestic product fell 0.2% in the first quarter. Inflation rose slightly slower than expected in the first half of June.

The bank also kept its interest rate at 8.25% in mid-May, forecasting an environment of increased uncertainty for growth in Latin America’s second largest economy.

Banxico will publish its monetary policy statement on Thursday at 1 p.m. local time (1800 GMT).

Reporting by Miguel Angel Gutiérrez in Mexico City and Gabriel Burín in Buenos Aires,; Writing by Rebekah F Ward in Mexico City, Editing by Daina Beth Solomon and Richard Chang

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