(Bloomberg) -- Nu Holdings Ltd, the world’s biggest standalone digital bank, will lower the yield on its high-yield savings account in Mexico by 25 basis points to 14.75%, just days after the country’s central bank cut its key rate.

The new yield will be in effect from April 16 until May 23, according to a statement. A key driver behind the move was a decision by Mexico’s central bank last week to lower its rate by 25 basis points to 11%, the Sao Paulo-based company added, noting it also looks at the macroeconomic context in Mexico while aiming to offer one of the most competitive rates in the market. 

Competitors, like Buenos Aires-based Ualá, had matched Nu at its 15% yields amid a frantic battle for customer acquisition that fintechs and digital banks are waging as they look to grow in Mexico, one of the largest unbanked nations in Latin America. The country has emerged as a key market for financial services startups given that less than 50% of the population has a bank account.

Banxico, as the central bank is known, made its first cut since 2021 last week, and in its guidance left open the possibility that it could pause monetary easing in the near future. Inflation hit 4.48% in mid-March, up from the previous month. Mexican banks don’t widely offer interest on deposits. 

The fintech race looks poised to remain heated, with Ualá Chief Executive Officer Pierpaolo Barbieri reiterating on social media platform X after Nu’s announcement that the company would keep its savings yield at 15%.

Nu has 6 million clients in Mexico, its CFO Guilherme Lago said in an interview after fourth-quarter earnings. The company aims to “win Mexico” and continues to invest in the country with no expectation of breaking even in the near term, he added.

(Updates with comment from Ualá CEO in fifth paragraph)

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