ZCZC
BCN-17
MEXICO-ECONOMY-RATE-BANK
Mexico’s central bank increases interest rate, equals record high
MEXICO CITY, Dec 21, 2018 (BSS/AFP) – Mexico’s central bank hiked its
benchmark interest rate on Thursday to match a record high of 8.25 percent on
the back of market volatility and uncertainty surrounding the policies of
leftist President Andres Manuel Lopez Obrador.
Unstable oil prices alongside the evolution of the Mexican peso reflect
“the uncertainty surrounding the new administration,” said Banco de Mexico
(Banxico) in a statement.
The increase of 25 basis points jacked the interest rate to its highest
since it reached 8.25 percent in 2008.
For the year, the indicator has risen 100 basis points from 7.25 percent
in January.
Banxico had increased its interest rates from 8.0 to 8.25 percent during
the 2008 financial crisis.
It’s the fourth time this year that Banxico has risen its interest rates,
but the first since Lopez Obrador, known by his initials AMLO, assumed office
at the start of the month.
The world economy’s “lower growth than that registered during the first
half of the year” as well as “financial activities in Mexico continuing to
display market volatility,” were also contributing factors to the decision,
Banxico said.
The move comes a day after Mexico’s northern neighbor, the United States
Federal Reserve, also ratcheted up its benchmark interest rate a quarter-
point to a range of 2.25-2.5 percent, despite repeated attacks from President
Donald Trump.
It was the Fed’s fourth rate hike of the year and came after Trump had
earlier said it would be “foolish” to increase the indicator.
BSS/AFP/HR/0938