Banco de Mexico leaves interest rates at 4.5 percent

The central bank of Mexico left interest rates intact on Friday as Latin America's most traded currency struggles to recover from touching its three-year lows against the U.S. dollar last week, Reuters reports.

The past two-plus months have seen the Mexican peso lose 8 percent of its value, which was largely attributable to the euro zone debt crisis. The Banco de Mexico left interest rates at 4.5 percent while also noting it is keeping an eye on development and growth.

May saw the nation's inflation rate increase in May, boosting to 3.85 percent after checking in at 3.41 percent in April. The year began with strong demand for manufactured goods from the U.S.

"A severe tightening of fiscal policy at the beginning of next year that is built into current law - the so-called fiscal cliff - would, if allowed to occur, pose a significant threat to the recovery," U.S. Fed chief Ben Bernanke told the Joint Economic Committee on Thursday.

The peso also started Friday's trade session recovering from 0.3 percent losses against the U.S. dollar, Bloomberg reports.