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Business Briefing / Mexico

Peso slides on interest rate cut

February 21, 2009|Times Wire Reports

Mexico's central bank cut its benchmark interest rate by a quarter-point to boost the country's sagging economy. The cut to 7.5% was less than expected but nonetheless sent the peso tumbling to a new low of 14.98 to the U.S. dollar before recovering slightly.

Analysts had expected the bank to cut its lending rate to 7.25% but said policymakers held back to protect the weakening currency, which threatens to spark continued inflation even as the country slips toward its own recession.

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