Central Banks
Mexico Stuns Markets With Half-Point Rate Hike on New Inflation Gain
- Central bank surprises with hawkish turn, decoupling from Fed
- All economists surveyed wrongly expected a quarter-point hike
Pedestrians pass the Bank of Mexico headquarters in Mexico City, Mexico.
Photographer: Alejandro Cegarra/BloombergThis article is for subscribers only.
Mexico stunned markets Thursday by increasing interest rates by half a percentage point, in a move by the central bank to outpace the US Federal Reserve that no top economist predicted. The peso jumped on the surprise decision.
Banxico, as the central bank led by Governor Victoria Rodriguez is known, raised its key rate 50 basis points to a record 11%, matching its half-point hike in December. The board also said in a statement that it could deliver a smaller hike at its next meeting.