Mexico keeps interest rate steady at record 11.25%

By Ovunc Kutlu

ISTANBUL (AA) - Mexico's central bank kept its key interest rate steady at the record high level of 11.25%, saying both annual headline and core inflation continued decreasing.

The move came in line with the market expectation, following a 25 basis points of rate hike on March 30 that pushed the interest rate to a record high of 11.25%, which marked the bank's 15th rate increase since mid-2021.

"Headline inflation continued decreasing in most economies. Nevertheless, it remains at high levels," Banco de Mexico’s Governing Board said Thursday in a statement. "Several central banks have stopped raising their reference rates."

"Forecasts for headline inflation were revised marginally downwards for some quarters, while those for core inflation remained practically unchanged. Inflation is still projected to converge to the 3% target in the fourth quarter of 2024," it added.

The central bank said Mexico's economic activity has shown resilience, while its labor market remains strong.

Mexico's annual consumer inflation came in at 5.84% in May, slowing pace from April's level of 6.25%, according to figures by its national statistics agency, INEGI.

On a monthly basis, consumer prices decreased 0.22% in May, following a 0.02% monthly decline the month before.