Mex­ico raises its bench­mark in­ter­est rate

Jamaica Gleaner - - BUSINESS -

MEX­ICO’S CEN­TRAL bank de­cided Thurs­day to raise its in­ter­bank in­ter­est rate by one­half per cent to 5.25 per cent, cit­ing “a more com­plex world economic panorama, caused among other things by the US elec­tions.”

The de­ci­sion was the sec­ond time in as many months the Bank of Mex­ico has raised the rate.

In Septem­ber, it raised the rate a half-point to 4.75 per cent, seek­ing to shore up a weak peso.

The volatile peso has de­pre­ci­ated sig­nif­i­cantly against the US dol­lar.

Some an­a­lysts had been ex­pect­ing a larger in­crease, given un­cer­tainty sur­round­ing the US pres­i­den­tial elec­tion of Don­ald Trump.

Trump has pledged to rene­go­ti­ate the North Amer­i­can Free Trade Agree­ment, de­port mil­lions of mi­grants and build a bor­der wall.

The peso’s in­ter­bank ex­change rate weak­ened from 20.34 to US$1 to 20.41.

Fi­nan­cial con­sult­ing firm Banco Base said on Thurs­day it is un­likely that the peso sta­bilises in com­ing days due to ex­pected changes in United States mone­tary pol­icy and un­cer­tainty about the in­com­ing ad­min­is­tra­tion of Don­ald Trump.

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