Daily Management Review

Bank of Mexico raises key rate by 50 points


According to a statement on the Bank of Mexico's website, the Governing Council hiked the key rate for the third time in 2022, by 50 basis points to 7%.

"From 13 May 2022, the Bank of Mexico's Governing Council has decided to raise its target overnight interbank interest rate by 50 basis points to 7.0 percent," the statement reads.

Experts from the organization underlined their concerns about global economic activity slowing in the first quarter of 2022, a prolonged rise in global inflation due to manufacturing bottlenecks, and rising food and energy prices. Financial conditions have tightened more, and interest rates have continued to climb, according to the paper. Expectations of a quick decline in global monetary stimulus remain unchanged.

According to the bank's experts, the Mexican economy reactivated in the first quarter despite an overall unfavorable environment, citing operational data.

The COVID-19 pandemic, persistent inflationary pressures, heightened geopolitical tensions, and a greater adjustment in monetary and financial conditions were mentioned as the primary hazards to economies at the global level.

source: reuters.com