The Bank of Mexico raised its benchmark interest rate by one-quarter to 4.75 percent in a 4: 1 split vote on Thursday to address short-term inflation concerns.
The central bank of the second-largest Latin American economy, also known as Banksico, has revised the inflation ward upward in its latest inflation forecast because of “global inflationary pressures and production disruptions”.
Mexican consumer prices rose 0.42 percent in the first half of September, and annual inflation reached 5.87 percent, up from 5.59 percent for August, official data showed last week.
Banicico still expects inflation to be short-lived and to decline after the fourth quarter of 2021.
Banxico said annual headline and core inflation estimates will decline, especially after one year and beyond, and will be converted to its 3 percent target by the end of the forecast horizon.
“The decision to expand Banksico was in line with our expectations, and in the first half of 2022, another ward upward revision was made in the inflation forecast. Financial austerity is ahead, ”said Church Seville, co-chair of the U.S. Sovereign Fitch Ratings.
It has raised benchmark interest rates for the third time since 2020 after raising rates at the same pace in June and August.
Reuters contributed to the report.
This News Originally From – The Epoch Times