MEXICO CITY, Aug. 15 (Xinhua) -- Mexico's central bank on Thursday lowered its benchmark interest rate for the first time in five years, citing inflation and downside risks for the Mexican economy.

Photo: VCG

The five-member governing board of Banxico voted to cut the overnight interbank interest rate by 25 basis points to 8 percent, the central bank said.

"In an environment of significant uncertainty, the balance of risks for growth remains biased to the downside," the bank said in a statement.

"The current environment continues to pose significant medium and long-term risks that could affect the country's macroeconomic conditions, its ability to grow and the economy's price formation process," the statement added.

Banxico also referred to a deceleration of the world economic activity in developed and emerging economies.

According to Banxico, the risks faced by the global economy have increased given an escalation of trade disputes, a disorderly Brexit, and the worsening of certain political and geopolitical risks.

The bank said that inflation expectation from surveys and financial markets have remained relatively stable, although it stood at levels above 3 percent, its official target.

"In order to consolidate a low and stable inflation ... the governing board will continue to closely monitor all factors and elements of uncertainty that have an impact on inflation and its outlook," the statement said.

The last time Banxico lowered the benchmark interest rate was on June 6, 2014.

The Mexican economy, the second biggest in Latin America after Brazil, is going through a deceleration phase in line with global trends.

In 2018, the Mexican economy grew 2 percent, and Banxico forecasts a lower growth for this year, between 0.8 and 1.8 percent.