Mexican and Peruvian Monetary Policies Tightened

November 11, 2022

Interest rate hikes were announced late Thursday in Mexico and Peru. The Bank of Mexico‘s overnight interbank interest rate was raised by an as-expected 75 basis points to 10.0%. The policy rate has been increased at twelve straight policy reviews since June 2021, including moves of 75 basis points each in the latest four instances. Earlier in the pandemic, the rate had been cut from 7.25% to 4.25% between February 2020 and February 2021. Mexican inflation of 8.4% in September was close to September’s 32-year high of 8.7%.

At the Central Reserve Bank of Peru, the Board of Directors  authorized the sixteenth key interest rate increase since August 2021, lifting such by 25 basis points to 7.25% compared to a level of just 0.25% when rate normalization began. 7.25% nonetheless remains below the 8.3% inflation rate as of October. Officials wish to see inflation back in target by the second half of next year.

Copyright 2022, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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