The Bank of Mexico raised its benchmark interest rate by a quarter percent to 4.75 percent in a 4: 1 split vote over short-term inflation concerns on Thursday.
The central bank of the second largest Latin American economy, also known as the Bank of Mexico, has revised up inflation with its latest inflation forecasts due to “global inflationary pressures and production bottlenecks.”
According to official data, consumer prices in Mexico rose 0.42% in the first half of September, with annual inflation reaching 5.87%, already above 5.59% in August.
Banxico expects inflation to remain short-term and will decline after the fourth quarter of 2021.
Banxico said annual headlines and core inflation forecasts are expected to decline, especially over a year or more, to reach the 3% target by the end of the forecast period.
“The Bank of Mexico’s decision to raise is in line with our expectations, with a further upward revision of inflation forecasts for the first half of 2022. However, the emphasis on the statement remains a temporary nature of price pressure and the Bank of Mexico Suggests that we will not see any more. Charles Seville, Co-Head of the Americas Sovereign at Fitch Ratings, said:
This is the third benchmark interest rate hike since 2018, after the Bank of Mexico raised interest rates at the same pace in June and August.
Reuters contributed to this report.
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Allen Zhong is a longtime writer and reporter for The Epoch Times. He joined the Epoch Media Group in 2012. His main focus is on US politics.