MEXICO CITY (Reuters) – Most of the Bank of Mexico’s board members consider its benchmark interest rate could be increased more moderately at the next monetary policy meeting, minutes of the central bank’s latest meeting showed on Thursday.
In a decision announced on Feb. 9, the five-member board unanimously voted to raise the key rate by 50 basis points to 11.00%, above expecations for a 25 point hike, citing a complex inflation scenario and suggesting future hikes would be smaller.
“Most members of the board consider that, given the monetary policy stance already attained and depending on the evolution of incoming data, for the next policy meeting, the upward adjustment to the reference rate could be of lower magnitude,” the minutes of the latest meeting showed.
The bank has carried out ten straight hikes of between 50 and 75 basis points since late 2021.
Banxico, as the Mexican central bank is known, has now raised its benchmark interest rate by 700 basis points during the current hiking cycle, which began in June 2021, as inflation surged past its target of 3%, plus or minus 1 percentage point.
Deputy governor Jonathan Heath told Reuters last week the bank’s monetary tightening cycle is nearing its end and nominal interest rates could top out at between 11.25% and 11.75%, at which point rates would be kept steady to allow them to take effect.
(Reporting by Anthony Esposito and Natalia Siniawski; Editing by Dave Graham)
