Financial institution of Mexico governor says tempo of hikes might change as wanted By Reuters

© Reuters. Mexico’s Central Financial institution Governor Victoria Rodriguez Ceja poses for a photograph after an interview with Reuters on the annual banking conference, in Acapulco, Mexico March 25, 2022. REUTERS/Javier Verdin

By Anthony Esposito

ACAPULCO, Mexico (Reuters) – The Financial institution of Mexico doesn’t must strictly observe the U.S. Federal Reserve’s anticipated rates of interest hike path and may tighten financial coverage at its personal tempo because it seeks to curb inflation, the central financial institution governor informed Reuters on Friday.

The 5 board members of Banxico, because the central financial institution is thought, voted unanimously to lift the benchmark rate of interest by 50 foundation factors to six.5% on Thursday, the seventh hike in a row. It was additionally the third straight 50-basis level enhance.

“We’re in fact involved to start with concerning the inflation we’re observing,” Victoria Rodriguez, who took the helm at Banxico in January, mentioned in an interview on the sidelines of an annual banking convention within the seashore resort of Acapulco.

She famous the Fed’s coverage trajectory was an “necessary variable” for Mexico however not the one one and that inflation has been rising for 15 straight months.

“It is not as if beforehand now we have determined to match one after the other” the Fed’s anticipated charge hikes, Rodriguez mentioned.

Inflation hit 7.29% within the first half of March, barely decrease than the earlier two-week interval, however greater than double Banxico’s goal charge of three%. The financial institution has a one share level tolerance vary above and under the goal.

“We do not know but if we’ll keep this tempo (of charge hikes) or one other. It’s going to be what is important to adjust to our mandate of a 3% inflation goal,” mentioned Rodriguez.

Rodriguez expects inflation ought to peak in the course of the first half of 2022 after which start a downward trajectory in the direction of goal within the first quarter of 2024.

Nevertheless, dangers and uncertainty have risen following Russia’s invasion of Ukraine, which have fueled power and grains value hikes.

“Concerning inflation there might be a big affect…we shall be taking note of what occurs and if we see an affect on inflation we’ll take the mandatory measures,” mentioned Rodriguez.

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