LatinNews Daily - 12 August 2022

*Mexico’s central bank (Banxico) has raised its benchmark interest rate by 75 basis points to 8.5% - its tenth consecutive rate hike. All five board members voted unanimously for the rate increase. Banxico revised up its inflation forecast for the end of 2022 to 8.1%, up from 7.5% in its previous (June) forecast. This comes as the national statistics institute (Inegi) announced annual inflation stood at 8.15% in July, well above Banxico’s target range of 3% +/-1. A statement issued by the bank on 11 August stated that the rate hike was a result of “tightening global financial conditions, the environment of heightened uncertainty, the accumulated inflationary pressures from the pandemic and the geopolitical conflict”. In the statement, the governing board listed persistently high core inflation, inflationary pressures from the coronavirus (Covid-19) pandemic, continued pressures on agricultural and energy prices from the conflict in Ukraine, and exchange rate depreciation as upside risks.

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