Mexico hikes interest rates again in bid to tame inflation

Mexico’s central bank hiked interest rates for the second consecutive meeting as rising consumer prices threaten inflation expectations and the economic recovery.

Mexico’s central bank raised borrowing costs for the second consecutive meeting Thursday, as stubbornly elevated and above-target consumer price increases have begun to contaminate inflation expectations. Banco de Mexico boosted its key interest rate by a quarter-point to 4.5% after a surprise hike in June that did little to tame inflation, currently running at almost double the bank’s target. All 22 economists surveyed by Bloomberg predicted the increase. “They’ve given a strong signal that with inflation running well above target they want a tighter policy,” said Nikhil Sanghani, a Latin America economist at Capital Economics, before the central bank’s decision was released.