Mexico raises key interest rate to 4.50%

RIO DE JANEIRO, BRAZIL – On Thursday, Mexico’s central bank (Banxico) raised its benchmark interest rate by 25 basis points to 4.50%. This is the second consecutive increase in Mexico’s benchmark interest rate. The previous one, in June, was also 25 basis points.

The decision was not unanimous. Three members of Banxico’s Monetary Policy Committee voted in favor of the increase, while the other two preferred to keep the rate the same.

In its statement, the Mexican central bank justified its decision by saying that global economic activity continues to recover, albeit in different ways in different countries, due to the availability of vaccines and the ability of each country to boost consumption, which has boosted inflation.

“Global inflation and the impact on supply chains and the production process of various goods and services have put pressure on general and underlying (core) inflation, which recorded annual rates of 5.81% and 4.66%, respectively,” Banxico said in its statement.

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