(Recasts story, adds comments from Banxico and details
throughout)
MEXICO CITY, March 30 (Reuters) - The Bank of Mexico's
five-member governing board unanimously voted to hike the
benchmark interest rate by 25 basis points to 11.25% on
Thursday, moderating the pace of its tightening cycle and taking
a more dovish tone on the future of rate moves.
Banxico, as the Mexican central bank is known, removed
language in its post-meeting statement that appeared in prior
statements explicitly mentioning the possibility of future
upward adjustments to the key rate.
It instead said that for its upcoming May 18 decision, its
"board will take into account the inflation outlook, considering
the monetary policy stance already attained."
With the latest increase, the 15th in a row and which was in
line with market expectations, Banxico has raised its key
interest rate by 725 basis points since its rate-hiking cycle
started in June 2021 to combat inflation.
Banxico pointed out that "with this action, it slows the
pace of interest rate increases and the monetary policy stance
adjusts to the trajectory required for inflation to converge to
its 3% target within the forecast horizon."
Over the prior 10 straight meetings Banxico had increased
the key rate by 50 basis points six times and 75 basis points
four times. The last time it had hiked by 25 basis points was in
November 2021.
"We anticipate Banxico is nearing the end of its policy
tightening cycle absent a resurgence of inflationary pressures
that may de-anchor inflation expectations. We project policy
rate will peak 11.5% by mid-2023, and Banxico will begin a
gradual policy easing in the later part of the year," said
Carlos Morales, sovereign director at Fitch Ratings.
(Reporting by Anthony Esposito; Editing by David Alire Garcia
and Jonathan Oatis)
Reuters Messaging:
david.aliregarcia.thomsonreuters.com@reuters.net))
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