Bank of Mexico hikes benchmark borrowing costs to record 10.50 per cent

• Financial

Later this week, the Bank of Mexico had raised its key interest rate further by 50 bps (basis percentage points) to a record 10.50 per cent, tightening the pace of the economy’s monetary policy while reflecting that the economy might hike its interest rate once more.

In the matter of the fact, latest decision from the Bank of Mexico had largely echoed the rate-decision from the US Federal Reserve just a day earlier, while the US Fed had raised its benchmark borrowing costs by 50 bps to a range between 4.25 and 4.50 per cent.

Apart from that, the US Fed Chair Jerome Powell was quoted saying followed by the two-day meet of the policymakers that the US Fed would likely to hike its benchmark borrowing cost by 75-bps next year. Nonetheless, on Friday, the New York Fed Chair said in a statement that the possibilities of a larger rate-hike than projected from the US Fed are mounting, while stoking frets that the Bank of Mexico would pursue a similar kind of measure.

Bank of Mexico hikes interest rate by 50-bps

Aside from that, four out of five board members of the Bank of Mexico had voted in favour a 50-bps rate-hike, while Esquivel had voted for a 25-bps rate hike. Meanwhile, followed by the media topline that the Bank of Mexico had raised its benchmark borrowing costs by 50-bps, the Banxico, Central Bank of Mexico, said in a statement, “The board considers it will still be necessary to raise the reference rate in its next monetary policy meeting.

Subsequently, it will assess if the reference rate needs to be further adjusted as well as the pace of adjustments based on the prevailing conditions”