August 22, 2009

Mexico's central bank left its benchmark interest rate unchanged for the first time this year, anticipating improvement in the economy in the second half of 2009.The bank kept the interbank rate at 4.5 percent after cutting it seven times this year to stimulate the economy.The peso strengthened slightly after the expected announcement, trading early Friday at 12.8 to the dollar compared to 12.9 on Thursday.

Mexico's recession - largely tied to the downturn in the United States - was severe in the first half of the year "but a better performance is expected in the second semester," the bank said in a report. The bank noted that the economic crisis in industrialized countries "seems to have hit bottom."However, the report warned that job recovery "will be slow and will depend, in large part, on the vigor of global recovery."