Bank of Mexico prepares interest rates up
2022.11.23 11:53
Bank of Mexico prepares interest rates up
Budrigannews.com – In a podcast that was released on Wednesday, Bank of Mexico board member Jonathan Heath stated that the Mexican central bank is “not ready yet to decouple” from the U.S. Federal
Reserve, and that doing so prematurely could lead to the weakening of the peso currency.
In an interview on a podcast that was hosted by Banorte, a Mexican bank, Heath stated, “I don’t see (decoupling) around the corner, not at all.”
“Temporarily, we really should keep on moving pretty much in accordance with the Fed … (decoupling) could see substantially more unpredictability, we might see … the Mexican peso start to deteriorate,” he added.
Examiners have been discussing when the Mexican national bank, known as Banxico, will end its ongoing loan cost climbing cycle.
Galia Borja, a member of the Banxico board of directors, stated the previous week that rate-hike “synchronization” with the Fed was conditional.
Additionally, Heath stated that the Mexican central bank will raise borrowing costs once more at its December meeting, implying that additional rate hikes are required to control inflation.
At the moment, Mexico’s benchmark interest rate is 10%.
Heath said Mexico’s yearly center expansion ought to top before the year’s over, guaging it would arrive at 8.6%-8.7% in November.
In October, core inflation, which excludes some volatile energy and food prices, was 8.42 percent.
He additionally anticipated center expansion could be around 4% toward the finish of 2023, expecting there are no unexpected shocks.
He stated, “We can then think about and analyze the cyclical implications of (growth in) the economy when we have inflation under control.”
Heath pointed out that despite the fact that the current rate-hike cycle began in the middle of 2021, Banxico’s monetary policy stance only became more restrictive in September.
He stated, “The first four 25-basis-point hikes didn’t really move the monetary stance.”
