Bank of Mexico

Bank of Mexico Votes Unanimously to Keep 7.0% Interest Rate

August 10, 2017

The Trump-driven plunge of the peso in 2016 lifted Mexican inflation and elicited six 50-basis point interest rate hikes and four increases of 25 basis points starting in December 2015 and most recently in June of this year. The final three increases were by 25 basis points. according to a released statement from the Bank […] More

Bank of Mexico

June 22, 2017

Mexico’s key central bank interest rate was raised for the seventh time since September and the tenth time since December 2015. Over the entire year and a half span, the rate has been lifted from 3.0%, the level between October 2014 and December 2015, to 7.0%. Today’s increase had been expected. CPI inflation of 6.3% […] More

Bank of Mexico’s Overnight Interbank Rate Lifted Another 25 Basis Points to 6.75%

May 18, 2017

Mexican monetary authorities raised their key interest rate for the ninth time since December 2015. Like the prior tightening at end-March and the first one of this sequence, today’s was 25 basis points in size. The other six moves were by 50 basis points each. Cumulatively, the interest rate has now been increases 375 basis […] More

Bank of Mexico Tightens Again

March 31, 2017

With the peso trading much better lately, Mexican monetary officials throttled back the size of its incremental hike of the overnight money rate to 25 basis points. However, with inflation still cresting and now above the 2-4% target  in lagged response to the peso’s steep losses prior to U.S. President Trump’s inauguration, further monetary restraint […] More

Another Mexican Central Bank Rate Hike

February 9, 2017

The U.S. election put Mexico in a world of hurt. A variety of policy initiatives by the new administration north of the border has weakened the peso sharply, driven Mexican import prices considerably higher and overall inflation above target, and depressed consumer and business confidence. Growth slowed last quarter. According to a released statement after […] More

Bank of Mexico

December 15, 2016

Mexican monetary officials just engineered the fifth 50-basis point interest rate hike of 2016. Along with a 25-basis point hike in December 2015, the rate has risen from 3.0% to 5.75% in the space of twelve months, nearly matching the dramatic tightening done by the Fed in 1994-5. The inflation dynamic faced by Mexican officials […] More

Bank of Mexico Overnight Interest Rate Raised a Fifth Time Since December 2015

November 18, 2016

Yesterday’s increase, like the previous three undertaken in February, June and September of this year, was by 50 basis points and lifts Mexico’s key central bank rate to 5.25%, highest since the first half of 2009. There was an initial 25-bp increase last December. The rate had ended 2008 at 8.25% but was at 4.5% […] More

Super Dollar at the Expense of Bonds, Commodities and Now Even Stocks

November 18, 2016

The dollar hit overnight highs of JPY 110.94 and 1.0581 per euro. The dollar climbed 0.9% against the loonie, 0.4% relative to the Australian currency, and 0.2% versus sterling. The dollar advanced 0.4% against the Mexican peso in spite of another 50-basis point increase in the Bank of Mexico’s overnight interest rate to 5.25%. That rate […] More

Bank of Mexico Raises Interest Rates for Third Time in 2016

September 30, 2016

As a U.S. presidential candidate with hostile intentions regarding relations with Mexico, Donald Trump is already influencing Mexican monetary policy the Bank of Mexico increased its policy interest rate to 4.75% from 4.25%. This was the third 50-basis point central bank rate hike since February and completely reverses easing undertaken between March 2013 and October […] More

Mexican Central Bank Interest Rate Left at 3.75%

May 5, 2016

Officials are watching the peso very carefully.  Excessive depreciation could lift expected inflation and thus jeopardize the 3% inflation target.  When the peso was dropping sharply in February, the key interest rate was hiked 50 basis points on the 17th at an emergency meeting arranged just 13 days after monetary officials had decided not to […] More