Mexico central bank seen holding steady after peso rally

3/18/16 Reuters

Mexican pesoMexico’s central bank is expected to hold borrowing costs steady on Friday after a rally in the peso dampened concerns that currency weakness will fan inflation higher.

All 15 analysts surveyed this week by Reuters said they expect the central bank to hold its key lending rate at 3.75 percent following a surprise hike in February that was aimed at supporting the battered peso.

The Mexican currency has rallied about 9 percent since the central bank delivered its half-percentage-point hike on Feb. 17 and intervened directly in the foreign exchange market for the first time since the 2009 financial crisis.

A global rally in riskier assets has helped lift the peso against the U.S. dollar. A statement from the U.S. Federal Reserve on Wednesday suggested it will likely take longer to raise rates than some had recently thought.

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