The 20 analysts surveyed expect Banxico, as the central bank is known, to raise its benchmark rate on Thursday by three-quarters of a percentage point from 8.50%, in what would be the third consecutive increase of this magnitude by the bank.
“In an environment where pessimism in financial markets continues, given expectations of further tightening from the Fed, we believe that Banxico will continue to try to remain cautious, contributing to greater local stability,” said Grupo Financiero Banorte.
Banxico has raised its target rate by 450 basis points during the current hike cycle, which began in June 2021, as inflation exceeded the bank’s target rate by 3%, plus or minus one percentage point.
Inflation in Mexico has continued to rise from high levels for decades. Annual inflation in Latin America’s second largest economy hit 8.76% in the first half of September, official data showed last week.
President Andres Manuel Lopez Obrador said on Friday the government would announce new measures to bring inflation under control following an agreement with businesses to maintain basic food prices.
Last week, the Fed announced its third straight 75 basis point hike, signaling that more hikes of the same magnitude may well be needed.
Mexico’s central bank will issue its monetary policy statement Thursday at 1:00 p.m. local time (1800 GMT).