UPDATE - Mexico keeps interest rate steady at 11.25%

UPDATES WITH MORE DETAILS

By Ovunc Kutlu

ISTANBUL (AA) - Mexico's central bank announced Thursday it kept its key interest rate steady at the record high level of 11.25%.

The move came in line with market expectations.

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.

"World economic activity is anticipated to have grown during the fourth quarter of 2023 at a more moderate rate than in the previous quarter, although it continues showing resilience," the central bank’s Governing Board said in a statement.

"In most advanced economies, headline inflation increased due to pressures on energy prices while core inflation continued decreasing. The central banks of these economies left their reference rates unchanged," it added.

The Banco de Mexico said annual headline inflation in the country has increased since the central bank's last monetary policy meeting.

"During January, it registered 4.88% as a result of a rebound in the non-core component, which is characterized for showing high volatility. Core inflation, which better reflects the trend in inflation, continued decreasing," it said in the statement.

"Core inflation, which better reflects the trend in inflation, continued decreasing. Nevertheless, it remains at relatively high levels, registering 4.76% during the same month," it added.

The central bank said its monetary policy stance remains in trajectory for inflation declining to the target of 3%.

It added that the Governing Board will "thoroughly" monitor inflationary pressures, and assess the possibility of adjusting the interest rate depending on incoming macroeconomic data in the next monetary policy meetings.

The Banco de Mexico's next meeting will conclude on March 21.