Mexico cuts benchmark interest rate 3/4 of a point

MEXICO CITY -- Mexico's central bank has cut the benchmark interest rate by three quarters of a point to spur growth in the recession-plagued economy.

The bank on Friday lowered the rate to 5.25% from 6%, saying the economy had contracted more strongly than expected this year.

Mexican Finance Secretary Agustin Carstens has said Mexico is in a recession after a drop in exports to the United States. About 80% of exports go to the United States, which is also in a recession.

Swine flu cost Mexico's economy at least $2.2 billion during the first 10 days of the outbreak.

The action marks the fifth time since January the bank has reduced rates, helping the battered Mexican peso.