Reuters.- The peso erased his earnings this afternoon and traded at a loss after the market met the aBanco de México’s monetary policy nuncio, in which he raised the benchmark interest rate for the fourth consecutive session to 5% in the face of persistent inflationary pressures.
Analysts mentioned that the local currency reacted in this way because part of the market was betting on a stricter tone in the press release of the monetary authority, while the stock market closed with little change.
The peso was trading at 20.67 per dollar, with a loss of 0.21% compared to 20.62 in the Reuters reference price the day before. Before the announcement, the peso appreciated as much as 0.8% to 20.46 units.
The Mexico’s benchmark stock index, the S & P / BMV IPC, advanced 0.01% to 51,707.01 points with a volume of 134.9 million securities traded.
The market expected the 25 basis point rise announced by Banxico, but several analysts had projected a greater increase after year-on-year inflation accelerated to its highest level in almost four years in October and core inflation rose to its highest in more than 12 years.
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In your statement, Banxico also once again adjusted its expectations for inflation upwards, which would close the fourth quarter at 6.8%, compared to 6.2% previously.
“The Mexican central bank’s 25 bp rise to 5.00% and the accompanying statement showed little sign that the authorities are preparing to accelerate the pace of adjustment in response to strong inflationary pressures,” said William Jackson, an economist at Emerging Markets from Capital Economics.
The peso had suffered a 1.58% drop on Wednesday, the steepest since June 16, after it was reported that inflation in the United States accelerated in October to its highest level since 1990. The data fueled bets on interest rate hikes in the world’s largest economy.
In the debt market, the 10-year bond yield fell 11 points to 7.22%, while the 20-year rate fell eight to 7.59%.
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