Mexico Raises Overnight Rate After Trump’s Win Wallops Peso
- Carstens said last week he’d wait and see how markets react
- Banxico had previously raised rates 1.5 points this year
Mexico Central Bank Raises Overnight Rate to 5.25%
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Mexico’s central bank raised borrowing costs for the fourth time this year after Donald Trump’s election dragged the peso to never-before-seen levels of more than 20 per dollar, boosting the risk of faster inflation.
Policy makers increased the key rate a half point to 5.25 percent Thursday, the highest level since 2009. Most of the 23 economists surveyed by Bloomberg beforehand expected a half-point increase, with the rest split between a hike of three quarters of a point and a full-point. The peso fell 0.9 percent to 20.3859 per dollar at 3:18 p.m. in New York, signalling that the market may have expected a bigger increase or more measures.