The Bank of Mexico announced a new increase of half a point in the interbank funding rate to leave it at 7%, recognizing greater pressures for general and underlying inflation.
The decision was taken by majority where one of the five members, Irene Espinosavoted in favor of an increase of 75 basis points.
According to the statement, the Government Board evaluated the magnitude and diversity of the shocks that have affected inflation and its determinants, as well as the risk of contaminating medium- and long-term expectations and price formation.
They also considered the greatest challenges in the face of the tightening of global monetary and financial conditions, the environment of heightened uncertainty, the greater inflationary pressures associated with the geopolitical conflict and the resurgence of Covid 19 cases in China and the possibility of greater effects on inflation.
With this decision, the interbank funding rate remains at levels not seen since August 2017, when inflation faced upward pressure generated by the withdrawal of the gasoline stimulus, a period that became known as “the gasoline boost”.
In the decision statement, they left their inflation forecasts unchanged, identified five upside risks to the inflation where they expect a variation of 6% for the second quarter; 5.8% for the third quarter and a final record of 7% for the period from October to December.
But they modified upwards the forecasts for next year, where they expect variations of 7.3% for the first quarter instead of the 7% anticipated in March. Today they project that the CPI it will reach 7.6% in the second quarter, which contrasts with the 6.9% estimated in the previous announcement and projects 7% and 6.4% for the third and fourth quarters, which are far from the 6.1% and 5.5% forecast in March.