Mexico: After 15 consecutive hikes, central bank keeps key rate unchanged at 11.25%

As expected, the Bank of Mexico held its key interest rate unchanged at 11.25%. The last time the bank left interest rates unchanged was in May 2021. Since then, it has raised the key rate from 4% to 11.25% in 15 consecutive meetings. The board stated that it "considers that it will be necessary to maintain the reference rate at its current level for an extended period," and the decision was unanimous.

Key takeaways from the statement: 

The Governing Board evaluated the magnitude and diversity of the inflationary shocks and their determinants, along with the evolution of medium- and long-term inflation expectations and the price formation process. It considered that the economy has started to undergo a disinflationary process given that many pressures have eased.

It deemed that these pressures continue having an incidence on inflation, as it remains high and the inflationary outlook is still very complex.

The Board will thoroughly monitor inflationary pressures as well as all factors that have an incidence on the foreseen path for inflation and its expectations. It estimates that the inflationary outlook will be complicated and uncertain throughout the entire forecast horizon, with upward risks.

In order to achieve an orderly and sustained convergence of headline inflation to the 3% target, it considers that it will be necessary to maintain the reference rate at its current level for an extended period.