UPDATE 1-Mexico central bank concerned about growth, U.S. election-minutes
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By Gabriel Stargardter and Alexandra Alper
MEXICO CITY Aug 25 (Reuters) - Mexican policymakers were unanimous in their decision to hold interest rates steady earlier this month, the central bank said on Thursday, while a majority of board members flagged worsening risks to growth.
Policymakers voted 5 to 0 to maintain the bank's key rate at 4.25 percent in an Aug. 11 decision in which they warned that uncertainty around the U.S. presidential election might cause deeper peso losses that could fan inflation.
The minutes from the meeting showed that a majority of board members remained concerned about the upcoming U.S. election and any effects on peso volatility. They also flagged possible monetary policy changes by the Federal Reserve Bank and the oil price as factors that could affect the peso.
A majority of members said the peso, which has weakened more than 7 percent this year, but is up nearly 2 percent in August, had been very volatile since the last board meeting.
However, a majority said that for the time being, there has been no evidence of any impact on inflation from peso weakness.
The balance of risks to growth has deteriorated since the last meeting, a majority of board members said, citing concerns over a slow manufacturing recovery in the United States and weaker economic confidence in Mexico, as well as lower oil production in Mexico.
On Monday, data showed Mexico's economy shrank in the second quarter for the first time in three years, prompting the government to revise down its 2016 growth outlook to a range of 2.0 percent to 2.6 percent from 2.2 percent to 3.2 percent. Continuación...