Mexican central bank hikes benchmark interest rate to 11.25%

MEXICO CITY (Reuters) – The Bank of Mexicos five-member governing board unanimously voted to hike the benchmark interest rate by 25 basis points to 11.25% on Thursday, in line with market forecasts and no longer mentioning possible future upward adjustments to the key rate.

“With this action, it slows the pace of interest rate increases and the monetary policy stance adjusts to the trajectory required for inflation to converge to its 3% target within the forecast horizon,” the bank said in its statement.

Banxico, as the Mexican central bank is known, added that for its upcoming May 18 decision, its “board will take into account the inflation outlook, considering the monetary policy stance already attained.”

With the latest increase, Banxico has raised its key interest rate by 725 basis points since its rate-hiking cycle started in June 2021 to combat inflation.

(Reporting by Anthony Esposito; Editing by David Alire Garcia)