The Central Bank of Mexico raised its benchmark interest rate for the fifteenth consecutive time on Thursday by 25 basis points to reach a new high of 11.25%.
This is the smallest increase since the upward cycle initiated by Banxico in June 2021 to control inflation, which so far has been rising in steps of 50 to 75 basis points.
Mexico’s monetary policy is adjusting to the trajectory necessary for inflation to converge towards its 3% target, Banxico added in its monthly statement. A goal it hopes to achieve in the fourth quarter of 2024.
Banxico pointed out that annual headline inflation fell more than expected. During the first half of March, 12-month inflation rose to 7.12%, slightly below the 7.24% predicted by analysts.
It warns, however, that consumer prices could rise further due to the depreciation of the peso due to international financial volatility and increased pressures on the costs and prices of energy and agricultural products.