Bank of MexicoBankico) remained unchangedfor the seventh time in a row interest rate 11.25%the highest level in its history, following rising inflation over the past three months.
In a statement that was in line with market expectations, the central bank “recognized the disinflationary process in the country“So it kept its 2024 forecasts unchanged but “believed the outlook remains challenging.”
The decision to extend the interest rate, which has been at this level since March 30, 2023, was approved unanimously and was in agreement with the US Federal Reserve (Fed), which last week kept the rate for the fourth time. range from 5.25% to 5.5%.
Mexico’s headline inflation rose to 4.88% in January
The decision came after it was announced hours earlier that headline inflation in Mexico rose to 4.88% in January, marking three straight months of growth after closing 2023 at 4.66%, above analyst consensus .
“The balance of risks regarding the expected path of inflation over the forecast horizon is considered to remain tilted upward,” the Bank of Mexico’s governing board said.
Banksico retained his inflation forecast overall by the end of 2024, it is estimated that will average 3.5% in the latest quarter.
He also reiterated his expectations for the end of 2025, when inflation will average 3.1%, close to the central bank’s target of 3%.
Possibility of adjusting the base rate
The autonomous body announced that “at future meetings it will evaluate, based on available information, the possibility of adjusting the base rate.”
The Governing Council will “consider the impact of the contractionary monetary policy that has persisted and continues to prevail on the evolution of inflation over the monetary policy horizon.”
He cited continued high core inflation, exchange rate depreciation, increased price pressures, the economy showing greater resilience than expected, climate impacts and escalating geopolitical conflicts as risks to growth.
“The economy posted strong growth in 2023, although the fourth quarter recorded a larger-than-expected slowdown,” he said in a statement.
The next monetary policy decision will be made on March 21. (EFE)
Source: Aristegui Noticias

Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.