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Mexico & Nafta - January 2019

Economic Highlights

Monetary policy shift: On 29 November 2018 Mexico’s central bank (Banxico) released the minutes of the latest meeting (15 November) of its board in which it decided to increase the benchmark interest rate by 25 basis points to a ten-year high of 8%. The minutes explain that Banxico’s board considered it “indispensable” to adjust monetary policy in order to ensure that the national inflation rate returns to its target rate of 3%. The inflation rate is currently running at around 4.5% but the Banxico board does not think that it will start trending down unless it continues implementing restrictive monetary policy measures, particularly in the face of the uncertainty surrounding the change in government in Mexico that took place on 1 December 2018.

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