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Banxico Shows Hawkish Side With Larger-Than-Forecast Rate Hike

  • The 50 basis-point hike exceeded most economists’ expectations
  • Board members look to curb annual inflation at more than 7%
Updated on

Mexico’s central bank unexpectedly accelerated the pace of interest rate increases, a hawkish move that seeks to contain quickly-deteriorating inflation expectations.

Policy makers led by outgoing central bank Governor Alejandro Diaz de Leon raised the benchmark rate by a half-point to 5.5% on Thursday, their most aggressive hike since February 2017. They surprised all but eight of 25 economists surveyed by Bloomberg, with the remaining 17 forecasting a fifth straight quarter-point hike.