Banxico unlikely to deliver bigger rate hike

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Deputy Finance Minister Gabriel Yorio. (Photo. Bloomberg)
  • Central bank to refrain from raising rate by 50bps, Yorio says
  • Bank has increased rates by 25 bps at its past four meetings

Mexico’s central bank is unlikely to speed up the pace of monetary tightening at next week’s board meeting, according to Deputy Finance Minister Gabriel Yorio.

The bank, known as Banxico, has hiked its key interest rate by a quarter-point in each of its past four meetings and isn’t likely to deliver a half-point increase in the last decision of the year, Yorio said Tuesday at a panel organized by Eurasia Group. 

Yorio, who attends board meetings in a non-voting capacity, said that tighter monetary policy has had a clear impact on inflation expectations but probably won’t influence consumer prices in the short term. 

He added that the government is not considering using price controls to tame inflation, which is currently running at more than double the bank’s target rate.