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15/12/2023 11:44

Bank of Mexico holds key interest rate at 11.25% for sixth straight time

The Bank of Mexico, as anticipated, opted to keep its benchmark interest rate unchanged at 11.25% during its sixth consecutive monetary policy meeting on Thursday.

Despite acknowledging progress in curbing inflation, the central bank noted the persistently challenging economic outlook. The unanimous decision by the five-member board aligns with the bank's previous guidance, emphasizing the need to maintain the current benchmark rate "for some time" to achieve the 3% inflation target with a one-percentage-point margin. Banxico reiterated its projection that inflation would align with the target in the second quarter of 2025.

Despite regional counterparts such as Brazil and Chile adopting rate cuts amid easing inflation, Banxico's board refrained from signaling the initiation of a rate-cutting cycle. In Mexico, the annual headline inflation in October reached its lowest point since February 2021 at 4.26%, slightly increasing to 4.32% in November.