By Brendan O’Boyle and Anthony Esposito
MEXICO CITY (Reuters) -The Bank of Mexico hiked its key interest rate by 75 basis points to a record 10.00% on Thursday, in line with forecasts and following in the footsteps of the U.S. Federal Reserve’s own recent three-quarters of a percentage point increase.
In a departure from recent decisions, the bank’s five board members did not vote unanimously for the increase, with deputy governor Gerardo Esquivel voting to hike the key rate by 50 basis points.
Banxico, as Mexico’s central bank is called, said at its “next meetings, the board will assess the magnitude of the upward adjustments to the reference rate based on the prevailing conditions.”
The newest rate move came just hours after President Andres Manuel Lopez Obrador warned in a news conference that raising rates could slow down the economy.
“I very much question the fact that everywhere the formula to lower inflation is to increase (interest) rates, but this is inconvenient for the economy because credit becomes more expensive,” the president said.
The bank has now raised its target rate by 600 basis points this current hiking cycle, which began in June 2021, as inflation has blown past Banxico’s target rate of 3%, plus or minus one percentage point.
(Reporting by Anthony Esposito and Brendan O’Boyle; Editing by Christian Plumb)
