Bank of Mexico 25 basis points hike expected amid forecast inflation rise: Reuters poll  

 

• The Bank of Mexico is expected to hike its benchmark interest rate to a record 10.75% on Thursday, amid a forecast increase in January inflation and following in the footsteps of the U.S. Federal Reserve, a Reuters poll showed on Tuesday.
• Banxico, as the Mexican central bank is known, is expected to increase the key rate by 25 basis points from a current 10.50%, according to 24 of the 25 analysts and economists surveyed. One participant expects rates to be increased to 11.00%. The expected move comes after the Fed scaled back to a quarter-percentage-point rate increase last week after a year of larger hikes and said it had turned a key corner in the fight against high inflation.
• Banxico has raised its benchmark interest rate by 650 basis points during the current hiking cycle, which began in June 2021, as inflation surged past the bank's target rate of 3%, plus or minus one percentage point.
• While inflation has been easing since hitting an over-20-year high of 8.70% in August and September last year, it remains far above Banxico's target.
• The median forecast of 20 analysts surveyed in the poll expects annual headline inflation at 7.89% for January, above the 7.82% reached in December. The core index, which strips out volatile food and energy products, is forecast to have accelerated to 8.41% year-on-year.
• Mexico's national statistics agency National Institute of Statistics and Geography (INEGI) will publish January inflation data on Thursday morning and that afternoon Banxico will publish its monetary policy statement.

(Source: Reuters)