Mexico's Sheinbaum says she agrees with central bank's rate cuts

MEXICO CITY, July 18 (Reuters) - Mexican President Claudia Sheinbaum said on Friday that she agreed with the Bank of Mexico's recent decisions to lower the country's benchmark interest rate, adding that further cuts would help attract investment.

Banxico, as Mexico's central bank is known, cut its benchmark interest rate by 50 basis points in June in a divided decision in which one deputy governor voted to hold the rate.

The bank has brought the key rate down by 325 basis points since early 2024 and by 200 points this year alone, as inflation has eased from its 2022 highs.

"It's the Bank of Mexico's decision to make, but I agree that the interest rate should be lowered because it helps investment. The lower the interest rate, obviously, there will be more loans and more investment in our country," Sheinbaum said in her regular morning press conference.

While Mexico's central bank is constitutionally independent from the executive branch, Sheinbaum's predecessor, Andres Manuel Lopez Obrador, often pressured the central bank to lower borrowing costs.

Annual headline inflation accelerated in May beyond the central bank's target range of 3% plus or minus one percentage point. While it eased in June to 4.32% after four months of increases, it remains above target.

Sheinbaum denied that the central bank's rate cuts have fueled an uptick in inflation.

Her comments echo President Donald Trump's demands that the U.S. Federal Reserve lower interest rates in order to spur economic growth.