The Strategist

Bank of Mexico raises key rate by 50 basis points



03/25/2022 - 09:15



The Governing Council of the Bank of Mexico raised its key rate by 50 basis points for the second time in 2022; now it stands at 6.5 percent, according to a statement on the organization's website.



Esparta Palma
Esparta Palma
"The Governing Council of the Bank of Mexico has decided to raise its target overnight interbank interest rate by 50 basis points to 6.5 percent effective March 25, 2022," the communiqué reads.

The organization's experts noted a slowdown in global economic activity in the first quarter of 2022, continued growth in global inflation under pressure from manufacturing bottlenecks, high food and energy prices - this supports expectations of a rapid reduction in monetary stimulus globally, financial conditions have tightened and interest rates have risen.

Bank specialists again revised upward the forecast for medium-term inflation in the country. The total inflation in the fourth quarter of this year will be 5.5% (previously 4%), the output to the target level of 3% is scheduled for 2024.

In the first year of the pandemic COVID-19 key rate of the Bank of Mexico declined to 4.25% amid an unprecedented decline in economic activity, but after the stabilization of employment and GDP recovery began to rise - in 2021, it has increased five times.

source: reuters.com




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