Analysts project new hike of 50 basis points to Mexico’s key rate in February: Citibanamex survey

Mexico’s central bank would raise its benchmark interest rate by 50 basis points to 6% at its next meeting of monetary politics in February, it showed a poll by the financial group Citibanamex released on Tuesday, amid persistent inflationary pressures.

Bank of Mexico (Banxico) raised the key rate by 50 basis points last week to 5.50% in a split decision, citing a deterioration in inflation forecasts. It was the fifth consecutive increase.

88% of the institutions participating in the survey estimated that the next movement of the benchmark rate will occur in the monetary decision of February 10, with a narrow majority anticipating a rise of 50 basis points, Citibanamex said.

The inflation local accelerated more than expected in November to 7.37%, its highest level since early 2001.

Banxico has a permanent inflation target of 3% +/- one percentage point.