Bank of Mexico holds key rate after nearly two years of hikes
2023.05.18 16:05
© Reuters. FILE PHOTO: The logo of Mexico’s Central Bank (Banco de Mexico) is seen at its REUTERS/Daniel Becerril
MEXICO CITY (Reuters) – The Bank of Mexico kept its benchmark interest rate steady at 11.25% on Thursday, in line with analysts’ forecasts, ending a nearly two-year cycle of rate hikes and saying it would keep the rate at its current level for an extended period.
Banxico, as the Mexican central bank is known, had raised its key interest rate by 725 basis points since June 2021 to combat rising consumer prices.
Annual inflation peaked in August and September at a more than two-decade high of 8.70%, slowing to 6.25% in April, the lowest level since October 2021.
While that is considerably higher than Banxico’s target of 3%, plus or minus a percentage point, the central bank said “it considered that the economy has started to undergo a disinflationary process given that many pressures have eased.”
