Bank of Mexico raises interest rate, remains at 7%

Through its official accounts, the Bank of Mexico (Banxico) reported on the decision to increase Reference interest rate at 50 basis pointswhich one it. keeps in 7 percentbecause it was in the first 6.5 percent,

With the presence of all its members, #BancodeMéxico. the board of governors Decision taken by a majority vote, to raise the overnight interbank interest rate to a level of 7.00% with effect from May 13, 2022″, the central bank shared from its official accounts.

According to official figures, this will be the eighth time in a row that bank of mexico rate increases, this is the fourth consecutive They consistently increase by 50 points. The increase was in line with the consensus of analysts, who insist that the monetary authority will face Recently observed inflationary pressures.

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“Global inflation continued to rise, under pressure from constraints, improving demand and higher food and energy prices. This continues to generate expectations for a more rapid reduction in monetary stimulus globally”, the Bank of Mexico added in a newsletter.

Also, it is read that Financial conditions registered an additional tighteningwhere interest rates have increased and dollar strengthened, it is in the context of avoiding higher risk. In addition to the increased target range of Fed funds interest rate at 50 basis points from United States Federal Reserve (FED)Having said that the growth is anticipated in the future.

“Among the global risks that are linked to the pandemic, prolongation of inflationary pressures, escalation of geopolitical tensions and more adjustments in monetary and financial conditions stand out,” the minister said. Banco Central.

Similarly, the Bulletin reported that inflation shocks recorded in the world due to two years of presence of covid-19add up the pressures caused by War between Russia and UkraineAdding to this the strict confinement measures recently imposed in China.

“Thus, April recorded normal and near-term inflation The annual rates are 7.68% and 7.22% respectively, its highest level since January 2001, while its expectations for 2022 and 2023 have increased significantly. There has been growth in the medium term, while the longer term targets have remained stable at above-target levels”, Banxico said.

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for his part, National Institute of Geography and Statistics (Ingei)pointed out that during the month of April, general inflation was located at a 7.68 percent annually, Which ranks her as the oldest at 21 years. Aside from the inflation issue, analysts believe that Benxico should be at odds with the Fed by increasing rates in magnitude and speed.

in early may The Fed raised the interest rate by 50 basis points.A condition that has not been observed since 2000, and with which the reference in the United States was located in the range of 0.75 to 1 percent.