Economy

Mexico reduces the benchmark interest rate and enters new phase against coronavirus, with subway closure

The decision was unanimous and was taken at an extraordinary meeting

mexican peso
Photo: Fernando Macias Romo/Shutterstock
  • This Wednesday Mexico has 9,501 confirmed cases of COVID-19, and 857 deaths due to the new coronavirus;
  • On Tuesday, however, the Mexican Health Minister Hugo Lopez-Gatell said that his team estimates that the real number of infections in the country is six times higher than the official number, around almost 56,000.

On Tuesday, the Central Bank of Mexico (Banxico) cut the benchmark interest rate by 50 base-points, to 6% per year. According to Dow Jones Newswires, the decision was unanimous and was taken at an extraordinary meeting.

READ ALSO: Chile presents minimum income project for vulnerable families

In a press statement released after the meeting, Banxico informed that the measure follows the complex global economic and financial situation caused by the COVID-19 pandemic, which led to important revisions of economic expectations, contraction of productive activity in the first half of 2020 and falling prices of commodities, especially oil.

Also on Tuesday Mexico has entered what the government calls “Phase 3” of the spread of the new coronavirus, the most serious stage. This Wednesday Mexico has 9,501 confirmed cases of COVID-19, and 857 deaths due to the new coronavirus.

READ ALSO: Coronavirus: How isolated Latin Americans are?

On Tuesday, however, the Mexican Health Minister Hugo LopezGatell said that his team estimates that the real number of infections in the country is six times higher than the official number, around almost 56,000.

As a consequence of this new phase of the disease in the country, Mexico City determined new measures as of April 23, such as the closure of about 20% of the city’s metro stations, and reinforcement in the cleaning of stations, trains, buses and other public spaces in the city.

To face the impact of COVID-19 on the government’s budget, President Andrés Manuel López Obrador (AMLO) also announced a kind of administrative reform in Mexico. According to Expansion, he said he will cut the salaries of senior government officials through a decree, and that he will suppress 10 sub secretaries, but would not suspend any of the country’s social programs.

AMLO also said that the planning of major infrastructure construction interventions, which can help generate jobs at a time like this, will also be maintained. He cited as an example the construction of the Santa Lucía International Airport and the Dos Bocas refinery.