UPDATE 1-Mexico’s central bank holds interest rates steady

(Adds quotes from central bank)

MEXICO CITY, Aug 20 (BestGrowthStock) – Mexico’s central bank said
it will keep interest rates low to boost the country’s still
weak economy and warned that manufacturing could slow because
of weaker U.S. demand for Mexican exports.

The rate decision on Friday was widely anticipated, but the
comments on growth suggest policy-makers are in no hurry to
follow other Latin American countries like Brazil and Chile in
raising borrowing costs.

Mexico is limping back from its deepest recession since
1932 after its economy contracted 6.5 percent in 2009. Growth
this year has been tepid and mostly powered by U.S. purchases
of Mexican exports like cars and televisions.

Regarding the economy in the United States, which buys
about 80 percent of Mexican exports, the central bank said:
“Everything points to a economic slowdown going forward.”

“In Mexico, manufacturing output and exports continue to
grow at accelerated rates, but considering the U.S. outlook,
this growth could moderate,” the bank said in a statement.

In its statement, the central bank held its target for
overnight bank lending at 4.5 percent, the lowest level since
policymakers began targeting the rate in January 2008.

The decision at the bank’s monthly policy review was
unanimously expected by 25 economists consulted in a Reuters
poll.
(Reporting by Jason Lange, Editing by W Simon )

UPDATE 1-Mexico’s central bank holds interest rates steady