La Jornada – BdeM applies unprecedented rate hike and reaches 7.75%

Mexico City. The Bank of Mexico (BdeM) unanimously applied this Thursday an unprecedented increase of 0.75 percent to its reference rate, that is, the one that determines the cost of credit to which companies and families are financed, with which it was located in 7.75 percent, with the aim of containing the high inflation.

This is the first time that the Mexican central bank has applied an increase of this magnitude to its reference rate, a movement anticipated by most analysts, since it is in line with the increase of the same proportion that the Federal Reserve made a few days ago. (Fed) of the United States.

In the statement in which it announced the decision of its last monetary policy meeting, the BdeM governing board highlighted the inflationary pressures facing the country, for which it announced that in the following decisions it intends to “continue increasing the reference rate and will value acting with the same forcefulness in case it is required”.

He highlighted that in the face of higher-than-anticipated inflationary pressures, the forecast for headline inflation was revised upwards until the third quarter of 2023 and that of core inflation was adjusted upwards for the entire horizon, although it is still expected that the convergence to the target of 3 percent is reached in the first quarter of 2024.

However, these forecasts are subject to upside risks, such as the persistence of core inflation at high levels; external inflationary pressures derived from the pandemic, greater pressures on agricultural and energy prices due to the geopolitical conflict, exchange rate depreciation and cost pressures.

Source link

Leave a Comment