Rhythm of Mexico rate hikes could start to slow, cenbanker says
2022.12.06 19:49
© Reuters. The logo of Mexico’s Central Bank (Banco de Mexico) is seen at its building in downtown Mexico City, Mexico August 9, 2022. REUTERS/Henry Romero/File Photo/File Photo
By Valentine Hilaire and Anthony Esposito
MEXICO CITY (Reuters) – The Bank of Mexico’s cycle of interest rate hikes is not yet over, though it could start to slow following four consecutive 75 basis-point increases, deputy governor Jonathan Heath said on Tuesday.
“We believe that we can maybe start to slow the rhythm (of interest rate increases), though continuing to raise them, because we’re coming close to what I believe could be a terminal rate,” Heath told reporters at an event.
Mexico headline inflation likely eased in November, opening the door for the central bank to slow the pace of rate hikes at its next meeting, a Reuters poll showed Monday.
Annual core inflation, which remains a concern for the central bank, is expected to have hit 8.58%.
Mexico’s central bank has raised interest rates to a record 10% in the current rate-hiking cycle in a bid to tamp down on inflation, which is well above the bank’s target rate of 3%, plus or minus one percentage point.
Banxico, as the central bank is also known, is due to meet for its next rate-setting decision on Dec. 15.
Heath said on Tuesday at an event in which he was awarded “Person of the Year” by Mexico’s “Fortuna” magazine that the central bank “was getting close” to the end of rate hikes.
