July 30 (Bloomberg) -- Mexico central bank Governor Guillermo Ortiz said the U.S. Federal Reserve's monetary policy is ``very lax'' and that the spread in benchmark rates between the two countries is strengthening the peso.

``The U.S. has very low interest rates. Monetary policy is very lax,'' Ortiz told Radio Formula. ``We can't deny that the interest rate differential is causing an appreciation in the exchange rate.''

Banco de Mexico increased its key lending rate for a second straight time this month to 8 percent, increasing the difference in benchmark rates between the two countries to 6 percentage points. Fed officials cut the U.S. benchmark interest rate 2.25 percentage points in the first four months of this year in the fastest reduction in two decades. The rate is now 2 percent. More than 20 central banks worldwide have raised borrowing costs this year.

Mexico's central bank today raised its inflation forecasts through 2010 because of higher-than-expected commodity costs. Annual inflation in Latin America's second-biggest economy has accelerated for five straight months.

To contact the reporters on this story: Jens Erik Gould in Mexico City at jgould9@bloomberg.net; Andres R. Martinez in Mexico City at +52- amartinez28@bloomberg.net

Last Updated: July 30, 2008 22:08 EDT