Investors drove Mexico's equity market and its currency down Friday after the central bank's interest-rate cut wasn't as deep as expected.
After the rate decision, data released showed the first contraction in the Mexican economy since 2003.
Mexico's IPC posted its fourth loss in a row, finishing 1.9% lower at 18, 324.23.
Shares of interest-rate sensitive banks finished mixed. Grupo Financiero Banorte slumped 1% and Banco Compartamos fell 1.6%. Grupo Financiero Inbursa reversed declines and rose 1.9%.
The Bank of Mexico on Friday lowered its benchmark interest rate by 25 basis points to 7.5%. The decision was below the market estimate for a half-percentage point cut.
"Manufacturing in Mexico is really collapsing and, for that reason, they need as much monetary help that they can get. A 25 basis-points cut was really somewhat meaningless," said Doug Smith, head of Latin American research at Standard Chartered Bank, in a telephone interview.
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