Banxico Said Not to Publish Minutes After Surprise Rate Increase

  • Mexico's central bank raised rate by half a point to 3.75%
  • Carstens said Feb. 17 the board unanimously voted for hike

Mexico’s central bank will skip publishing the minutes of last week’s surprise rate decision in which the board increased borrowing costs by a half a point to head off inflation, according to two people familiar with the decision.

Central bank Governor Agustin Carstens announced the rate increase at a news conference on Feb. 17, the first surprise hike in at least 13 years, pairing the move with the Finance Ministry’s decision to cut spending amid plummeting oil prices. The central bank began publishing minutes of its meetings in February 2011, a year after Carstens took office, in an effort to make the bank’s communications with the markets more transparent.

The central bank had agreed when it began to publish the minutes to its meetings that it wouldn’t do so for extraordinary sessions, according to one of the people, who was not authorized to speak publicly about the matter.

"I’m surprised that there will not be minutes," Alonso Cervera, Credit Suisse Group AG’s chief economist for Latin America, said. "I wish we had them, because they would help us assess the thinking within the board and what transpired in those two weeks that made them pull the trigger."

Policies, Peso

The bank usually publishes minutes two weeks following the policy makers’ actual meeting.

Mexico’s central bank raised its key rate by a half point to 3.75 percent on Feb. 17, saying that the drop in the nation’s currency due to falling oil prices had increased the probability that inflation expectations would rise above the central bank’s 3 percent goal.

While policy makers said the decision didn’t represent the start of a tightening cycle, analysts expect the central bank to raise rates another quarter point by the end of the year, according to the median forecast in a Bloomberg survey.

The peso has fallen about 5.9 percent this year, matching the British pound for the worst performance by a major currency, and slumped to a record low 19.4448 per dollar on Feb. 11.

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