BANK OF MEXICO HIKES RATES TO CURB PRICE PRESSURES

The Bank of Mexico Thursday raised its key interest rate by 25 basis points to 4.5 per cent in a bid to contain price pressures, and more increases are expected this year even though two of its five-member board voted to leave borrowing costs unchanged. The three-to-two vote in favour of a rate hike, the second in succession by the bank, was in line with the consensus forecast of a Reuters poll of analysts. In its latest monetary policy statement, the bank, known as Banxico, said the balance of risks for inflation within its forecast horizon was biased to the upside. “Although the shocks that have increased inflation are expected to be transitory, due to their variety, magnitude, and the extended horizon over which they have affected it, they may pose risks to the price formation process,” the bank said.