Bank of Mexico signals ‘prolonged’ interest rate hold
2023.05.31 16:04
© Reuters. FILE PHOTO: The Bank of Mexico logo is seen on the facade of an office building in downtown Mexico City, Mexico, February 9, 2022. REUTERS/Edgard Garrido
By Brendan O’Boyle and Isabel Woodford
MEXICO CITY (Reuters) – Mexico’s central bank on Wednesday signaled it would hold the country’s benchmark interest rate at its current all-time high for an extended period of time in order to bring inflation down to the bank’s target range.
“To achieve orderly and sustained convergence of headline inflation to the 3% target, the bank’s governing board considers that it will be necessary to maintain the benchmark rate at its current level for a prolonged period,” the Bank of Mexico said in its quarterly economic report.
The central bank’s governing board unanimously held the benchmark interest rate steady at 11.25% on May 18, breaking a nearly two-year rate-hike cycle.
In its quarterly report, the bank also raised its economic growth forecast for 2023 to 2.3%, an upward revision from 1.6% in its March report.
