Mexico Central Bank raises benchmark interest rate to 8% from 7.75%

Mexico Central Bank has recently announced its decision to raise its benchmark interest rate by 25 basis points to 8%. Below are some key highlights from the policy statement, via Reuters.

• Balance of risks to growth from a cyclical perspective continues tilted downwards.
• Balance of risks to expected trajectory for inflation has deteriorated and shows an important upward bias in environment of marked uncertainty.
• Board was not unanimous on rate decision.
• Monetary policy should respond with prudence if economic uncertainty increases considerably.
• One member voted for 50 basis point increase.
• Peso exchange rate was affected by the announced cancellation of the new Mexico City airport and concerns about policies of the new administration, legislative initiatives.
• Will take necessary actions, in particular holding or possibly strengthening current monetary policy to reach inflation target.