(Recasts with focus on weak economy, adds policymaker, analyst comments)
MEXICO CITY, April 9 (Reuters) - Most of Mexico’s central bankers are eyeing slack in the economy that could keep them from quickly raising interest rates and only one policymaker is calling to raise borrowing costs ahead of the United States.
Central Bank board members voted 5-0 at their March 26 meeting to hold their benchmark rate at a record low of 3.0 percent, minutes showed on Thursday, and most policymakers were concerned by deep losses in the peso.
Mexico’s peso last month sank to a historic low against the dollar, hammered by a slump in oil prices and fears that an imminent U.S. rate hike may push investors to dump emerging market assets.
Central bank minutes showed some members were concerned that expectations about higher U.S. interest rates could hit the peso currency even more, but policymakers disagreed about when the bank should raise borrowing costs.
“It would be advisable to move before the U.S. Federal Reserve to consolidate lower inflation and protect financial stability in Mexico,” one member said, according to the minutes.
But two members countered that because of tame consumer prices and well anchored inflation expectations, “there would be little to gain from moving before the United States, and it could be an error” given a weak economy.
After the peso slump, some market players bet that Mexico could hike interest rates in a bid to keep yield-hungry global investors from shedding Mexican bonds and deepening peso losses. But analysts said the minutes suggested Mexico was unlikely to move first.
“This is a confirmation that Banxico is waiting for the Fed to move,” said Marco Oviedo, an analyst at Barclays in Mexico City. “The idea of a preemptive hike has less support than the previous meeting.”
All of the Banco de Mexico board said growth had been weaker than expected so far this year, and some said a decline in oil production could continue to weigh.
Most policymakers said they expect inflation, which ticked up to 3.14 percent last month, to remain around their 3 percent target this year and close 2015 slightly below that level.
Latin America’s No. 2 economy is expected to grow just under 3 percent this year after a 2.1 percent expansion last year. (Reporting by Alexandra Alper and Michael O‘Boyle; Editing by Gabriel Stargardter, Gunna Dickson and Ted Botha)