Bank of Mexico seen hiking key rate by 25 basis points on Thursday- Reuters Poll
Reuters
Published Mar 27, 2023 04:25PM ET
By Noe Torres
MEXICO CITY (Reuters) - The Bank of Mexico is expected to moderate the pace of its monetary tightening, and hike the benchmark interest rate by 25 basis points on Thursday as inflation has shown signs of cooling, a Reuters poll showed on Monday.
All 20 analysts surveyed said they expect Banxico, as the Mexican central bank is known, to increase the key rate to 11.25%, in what would be the 15th rate hike in a row.
Banxico's five-member governing board unanimously voted to increase the key rate by 50 basis points to 11.00% in early February, beating market forecasts, citing a complex inflation scenario.
At the time, Banxico suggested that while its rate hiking cycle was not over, future increases could be smaller.
Banxico has raised its key interest rate by 700 basis points to 11.00% since its rate-hiking cycle started in June 2021 to combat inflation.
Mexican consumer prices rose less than expected in early March, with annual headline inflation hitting 7.12%, down from 7.48% in the second of half of February, official data showed on Thursday. The data boosted bets Banxico could slow the pace of its rate hikes.
Banxico's scheduled Thursday decision comes after the U.S. Federal Reserve last week raised interest rates by a quarter of a percentage point, but indicated it was on the verge of pausing further increases in borrowing costs amid recent turmoil in financial markets spurred by the collapse of two U.S. banks.
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Written By: Reuters
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