Mexico’s central bank governor Victoria Rodriguez Ceja is still considering whether or not to implement an interest rate hike that is lower than last month’s 50 basis point hike. The governor, who was attending the country’s annual banking convention, stated that “Banxico” will consider several factors before making a final decision, including incoming inflation data.
“The increase that we could make in the next decision, we consider that it could be of a lesser magnitude,” Rodriguez stated. “We’ll take into account the decision of the Fed and many other factors, to the extent that they affect the inflation panorama.”
Since June 2021, Banxico has added 700 basis points through its interest rate hikes, thereby diverting from the trend of other Latin American central banks to remain fairly stagnant in terms of borrowing costs.
Mexico’s annual inflation in February slowed to 7.62%, lower than expected and the lowest point in almost a year. This is a significant decline from the peak of 8.7% that was reached in September last year.