MEXICO’S central bank yesterday announced another big increase in its benchmark interest rate in a bid to halt galloping inflation.

It was the 12th consecutive interest rate hike by the bank, rising 75 basis points to 10%.

Interest rates were already at an all-time high before the latest increase.

The bank said it was “adjusting the monetary policy stance to the trajectory required for inflation to hit its 3% target.”

On Wednesday, the Inegi national statistics institute said Mexico’s year-on-year inflation had reduced in October to 8.4%, having hit a record 8.7% the previous month.

The bank blamed the lingering effects of the pandemic and Russia’s invasion of Ukraine for high prices.

It said inflation would hit the 3% objective in the “third quarter of 2024”.

The bank pointed to the appreciation of the peso that had shown “greater resilience than other currencies” and a superior economic recovery than expected, which has already returned close to pre-pandemic levels.

Mexico’s economy contracted 8.4% in 2020 before growing 5% last year.

Analysts expect a 2.1% growth this year. – AFP, November 11, 2022.