February 7, 2019 / 7:59 PM / 2 months ago

UPDATE 1-Mexico central bank holds rates, warns on early 2019 growth

(Adds central bank’s comments, background details)

MEXICO CITY, Feb 7 (Reuters) - Mexico’s central bank held its benchmark interest rate steady on Thursday, citing softer inflation and worries that economic growth could slow further in early 2019.

In a unanimous decision, the Bank of Mexico’s (Banxico) board members voted, as expected, to hold the overnight interbank rate at 8.25 percent, its highest level since August 2008.

Data published by the INEGI national statistics agency showed earlier on Thursday that consumer prices rose at a milder pace than anticipated in January, prompting analysts to forecast a rate hold.

The bank said a slowing world economy, some weakness in domestic demand, and “transitory” factors, including problems with fuel distribution and the blocking of transportation routes, could contribute to slower growth over the next few weeks.

“During the fourth quarter of 2018, Mexico’s economic activity decelerated significantly as compared to the third quarter and this pattern could continue at the beginning of 2019,” Banxico said in its post-meeting statement.

In his first major crackdown on entrenched corruption, new Mexican President Andres Manuel Lopez Obrador in December announced a crackdown on fuel theft.

The move to stamp out the theft of $3 billion of fuel annually prompted widespread gasoline shortages and long lines at gas stations in January.

Separately, protesting teachers have blocked railways and prevented trains from delivering millions of dollars in goods. (Reporting by Anthony Esposito; Editing by Leslie Adler and Jonathan Oatis)

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