Reuters.- The Bank of Mexico (Banxico) would raise the benchmark interest rate for the fifth time in a row in its monetary policy announcement next week, according to a Reuters poll, while local inflation levels reached their highest level in more than 20 years.
According to the survey, 14 out of 17 analysts consulted expect that the Banco de México (Banxico) raise the funding rate by 25 basis points (bp) at 5.25%. Three participants projected that the entity will raise the rate by 50 bp.
Year-on-year inflation accelerated more than expected in November and again far exceeded the official target.
The National Consumer Price Index stood at 7.37%, its highest record since January 2001, from 6.24% in October.
“The Board of Banxico has given evidence of not being in a hurry to accelerate the normalization of monetary conditions and have revealed their intention to continue with their gradual approach“Said Alfredo Coutiño, director of analysis for Latin America at Moody’s Analytics.
“This is not necessarily what the national inflationary reality requires, which increases the risk of a sudden adjustment as soon as the markets receive a shock from abroad,” he added.
Follow information about business and current affairs in Forbes Mexico
Other analysts have opined that the key rate adjustment should be gradual, as has happened, given the weakened local economy.
Banco de México will publish its last monetary policy statement of the year on Thursday at 1:00 p.m. (1900 GMT).
Follow us on Google News to keep you always informed