Mexico keeps interest rate steady at 11%

By Ovunc Kutlu

ISTANBUL (AA) - Mexico's central bank kept its key interest rate steady at 11%.

The move came in line with market expectations, while the Banco de Mexico on March 21 this year reduced its policy rate by 25 basis points to 11.00% from 11.25%.

"World economic activity grew in the first quarter of 2024 at a higher rate than in the previous quarter," the central bank’s Governing Board said Thursday in a statement.

"In various advanced economies, headline and core inflation continued decreasing, although, in some cases, both of them increased in their latest readings," it added.

The Banco de Mexico last made a hike in March 2023 that pushed the interest rate to a record high of 11.25%, which marked its 15th rate increase since mid-2021.

"Annual headline inflation rose from 4.40 to 4.65% between February and April 2024, as a result of an increase in the non-core component. Core inflation, which better reflects the inflation trend, continued decreasing during the same period, from 4.64 to 4.37%," said the statement.

"Expectations for headline and core inflation for the end of 2024 adjusted upwards. Those for longer terms remained relatively stable at levels above target," it added.