Mexico: Banxico lowers policy rate by 50 basis to 6% in surprise decision

Mexico's central bank, Banxico, cut its policy rate by 50 basis points to 6% in a surprise announcement on Tuesday. "The GDP could contract by more than 5% in the first half of 2020 compared to the previous year," Banxico noted in its policy statement.

Additional takeaways

"Central bank decided unanimously to lower key rate."

"Central bank says has decided to take additional measures to promote orderly behavior in markets, strengthen credit channels and promote liquidity."

"Balance of risks to growth has a significant downward bias."

Market reaction

The USD/MXN pair spiked to 24.4320 with the initial reaction but quickly retreated. As of writing, the pair was up 1.33% on the day at 24.3620.