Banxico Raises Interest Rates for Sixth Straight Time amid Soaring Inflation

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Mexico’s Central Bank (Banxico) on Thursday, Feb. 10, raised its key interest rate for the sixth consecutive time in response to what it called greater and longer-than-expected inflationary pressures. B

Banxico said in a statement that its governing board had decided by majority vote to raise the target for the overnight interbank interest rate by 50 basis points, to 6 percent, effective on Friday, Feb. 11.

Mexico’s headline inflation, the raw inflation figure reported through the consumer price index, reached 7.07 percent year-on-year in January, Banxico said.

The bank said it also raised its forecasts for the country’s headline inflation at the end of this year to 4 percent, and to 3.1 percent for the end of 2023.

Banxico has a 3-percent inflation target, but the figure has climbed to its highest level in two decades, largely due to the covid-19 pandemic, it said.

According to the bank, world inflation has continued increasing due to pressures driven by bottlenecks in production and high levels of food and energy prices, among other factors.

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