The upward cycle of the Bank of Mexico (Banxico) continues and on February 9 the institution surprised the market and raised the interest rate by 50 basis points this Thursday. With this, the reference rate stands at 11%.

This is the 14th time in a row that the Central Bank has raised the rate, a cycle that is close to completing two years, since it began in June 2021.

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Banxico's decision is different from the one taken by the Federal Reserve at the beginning of this month, when it increased its referential by 25 base points, to place it in a range of 4.50-4.75%.

The new inflation data in Mexico could have 'put pressure' on the Central Bank. The National Institute of Statistics and Geography (Inegi) revealed this Thursday earlier that in January, the index stood at 7.91 percent at the annual rate, which represented an advance compared to December, when it closed at 7.82 percent.

Among the products that contributed to the 'acceleration' of inflation in the first month of 2023 were lunch boxes, torterias and taco shops; cigarettes and low octane gasoline.

Banxico's sole mandate is to maintain low and stable inflation, in a target range of 3 percent +/- one percentage point, which suggests that the upward cycle will continue for at least a good part of 2023.

Jonathan Heath, one of the four deputy governors of the institution, said that the rate would rise in February and that the option of leaving it "frozen" for at least six months could be studied.

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The most recent private consumption data may support Heath's 'proposal'. Despite the El Buen Fin discount program, Mexicans spent less in November as the Monthly Indicator of Private Consumption in the Market fell 0.63 percent at a monthly rate.

One of Banxico's purposes when increasing the interest rate is to discourage this type of spending. If this happens, the supply of products increases and, in theory, the products, companies or businesses begin to lower their prices in order to 'get' their merchandise.

In Solili you can consult industrial warehouses available in Ciudad Juárez and Chihuahua

Original note