Mexico’s central bank raised its benchmark policy rate by 50 bps to 5.50 percent on December 16th, accelerating from a 25 bps hike in the previous meeting, and above market expectations, to mark the fifth consecutive hike, Trading Economics reports on website
The monetary authority said that the inflation risk balance has deteriorated, while both the headline inflation and the core inflation expectations for the next year increased again, while the ones for the medium-term remained above the target.
So, in order to adjust the inflation trajectory, it was deemed necessary to reinforce the monetary policy stance by adjusting it to the trajectory required for inflation to converge to its 3% target within the forecast horizon.
The decision was not unanimous, with four members voting for a 50 bps hike, while one voted for a 25 bps hike. The monetary committee will keep monitoring the risks surrounding inflation and the expectation, and it is ready to respond if it seems necessary.