Mexico keeps interest rate steady at record high of 11.25%

ISTANBUL

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 the market expectations.

The Banco de Mexico last made a hike on March 30 that pushed the interest rate to a record high of 11.25%, which marked its 15th rate increase since mid-2021.

"Headline inflation continued decreasing in most economies. Nevertheless, it remains at high levels," the bank’s Governing Board reiterated in a statement. "The core component keeps showing a resistance to decline."

"In Mexico, since the previous monetary policy decision, government bond yields, mainly medium and long-term ones, increased. The Mexican peso exhibited volatility and depreciated. Economic activity shows resilience and the labor market remains strong," it added.

The annual consumer inflation came in at 4.79% in July, slowing from June's level of 5.06%, according to the national statistics agency INEGI.

The Banco de Mexico said that the annual headline and core inflation continued decreasing, coming in at 4.44% and 5.78%, respectively, in September, but remains still high.

"In order to achieve an orderly and sustained convergence of headline inflation to the 3% target, it considers that it will be necessary to maintain the reference rate at its current level for an extended period," the bank said in its statement.