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Mexico Raises Key Interest Rate to Highest Ever as Inflation Accelerates

  • Hikes rate to 8.5%, highest since targeting began in 2008
  • Delivers second-straight 75 basis-point hike, drops guidance
A shopper purchases vegetables at the Central de Abastos Market in Mexico City, Mexico.

A shopper purchases vegetables at the Central de Abastos Market in Mexico City, Mexico.

Photographer: Alejandro Cegarra/Bloomberg
Updated on

Mexico’s central bank boosted its key interest rate to an all-time high after inflation hit the fastest pace in over 21 years, but dispensed with hawkish forward guidance that it had given in its previous decision.

Banxico, as the bank is known, on Thursday delivered a second straight increase of 75 basis points to the benchmark rate, taking it to 8.5%, as expected by all 24 economists in a Bloomberg survey. Never since the bank began targeting inflation in 2008 has monetary policy been so restrictive, with the previous record being 8.25%.