Photo: Global Exchange

By THE PULSE NEWS MEXICO STAFF

The Central Bank of Mexico (Banxico) on Thursday, March 24, increased its baseline interest rate by 0.50 percentage points to 6.5 percent in response to soaring inflation, which reached 7.29 percent in the first half of March.

This was the seventh time in a row that Banxico has raised the rate, and the third in a row in which the increase was by 50 points, as opposed to the standard 25 points.

During his daily morning press conference on Thursday, President Andrés Manuel López Obrador admonished Banxico, which is supposed to be an autonomous body with no interference from the executive branch, saying that with the new increases “there will be less investment in Mexico.”

AMLO also presumptively announced the Banxico hike before the Central Bank could do so, thus further treading on its alleged autonomy.

The president later apologized to Banxico for the error, and Banxico accepted his apology.

On Friday, March 25, AMLO was asked who had leaked the information of the Banxico hike to him, and he said it was Treasury Secretary Rogelio Ramírez de la O.

The Banxico funds rate is the benchmark interest rate banks charge on loans to each other and is used to set borrowing costs on credit cards, automobile loans and mortgages.