Key borrowing rate now at 10.50, compared to 10.75 before
Deputy Governor Jonathan Heath voted to hold rate steady
Bank says inflation outlook demands restrictive policy
Core inflation rate at lowest level since early 2021

MEXICO CITY, Reuters The Bank of Mexico lowered its benchmark interest rate by 25 basis points to 10.50 on Thursday, the second straight cut as price pressures have been easing in Latin America39;s No. 2 economy.

The bank struck a cautiously optimistic tone on the possibility of additional cuts to the key borrowing rate.

The latest rate cut approved by the central bank39;s fivemember governing board was not unanimous. Deputy Governor Jonathan Heath voted to hold the rate at 10.75.

Analysts polled by Reuters had overwhelmingly forecast the 25basispoint cut.

In a statement announcing its decision, Banxico, as the central bank is known, noted that the global inflation outlook has improved while the closely watched core inflation rate, considered a good indicator for price trends, is expected to keep decreasing.

Looking ahead, the board expects that the inflationary environment will allow further reference rate adjustments, the statement said, emphasizing however that the outlook for inflation still calls for a restrictive monetary policy stance.

Mexico39;s annual headline inflation slowed to 4.66 in the first half of September, official data showed on Tuesday, its fourth consecutive fortnight of declines. Core inflation moderated to 3.95, its…