Leave a Reply
You must be logged in to view and post comments.
The Bank of Mexico (Banxico) surprised with a 0.25 percentage point hike in their policy interbank rate at the June 24 Monetary Policy Committee meeting, raising the rate to 4.25%; no economists surveyed by Bloomberg prior to the decision had expected a hike. Banxico’s announcement cited the jump in U.S. CPI inflation to the highest since 2008 in May; Banxico rarely highlights a specific foreign data release in this way. They also noted that Mexican inflation jumped to 6.0% in year-ago terms in the first half of June, and core inflation to 4.6%, both overshooting Banxico’s 3.0% target. Banxico explained the June rate hike as a response to the risk of a faster withdrawal of monetary stimulus outside of Mexico in response to higher inflation; Banxico also wants to prevent a rise in Mexican inflation expectations.
