Mexico raises interest rate by 75 basis points to 8.50%

By Ovunc Kutlu

ANKARA (AA) - Mexico's central bank raised its interest rate by 75 basis points to 8.50% on Thursday, citing inflationary pressures.

"World economic activity weakened during the second quarter and recent indicators suggest that said weakness would persist during the third quarter," Banco de Mexico said in a monetary policy statement.

"Inflation continued increasing, in some cases reaching once again levels unseen in decades, in an environment where unbalances between demand and supply in diverse markets and high levels of food and energy prices persist," it added.

The bank said the US Federal Reserve and other central banks around the world have continued raising interest rates against high inflation.

It listed key global risks for the increase including the coronavirus pandemic, persistence of inflationary pressures, geopolitical turmoil and adjustments in monetary and financial conditions.