Mexico’s central bank board made a divided decision to raise interest rates on Thursday and policymakers suggested that they may have raised borrowing costs enough to contain a spike in inflation.
Banco de Mexico raised its benchmark rate MXCBIR=ECI by a quarter percentage point to 7.00 percent, as expected by all 17 analysts surveyed by Reuters last week. One member voted to hold rates, the bank said in a statement.
The central bank has now raised its main interest rate in the last seven meetings. The rate has reached the highest level since early 2009, with inflation at more than an eight-year high.
Policymakers said in their statement that with Thursday’s hike “the reference rate has reached a level that is consistent with the process of efficient convergence of inflation to the 3 percent target,” though they said they would be vigilant.