The Bank of Mexico (Banxico) decided to close the year with a 50 base point increase in the reference interest rate, following the Fed and softening the increases in the reference interest rate by moving it from 10% to 10.5%.

The members of the Governing Board voted to bring the rate to the historic level of 10.5% in an attempt to control inflation and bring it to the target of 3% +/- one percentage point. The decision to raise the rate by 50 points was not made by a majority, since Deputy Governor Gerardo Esquivel voted to raise the rate by 25 basis points.

Consult here: The vacancy of industrial markets in Mexico continues to decrease

The global challenges for inflation are those related to the pandemic, the prolongation of inflation risks and the worsening of geopolitical tensions. Likewise, the members of the board indicated that there will be more rate increases at the next meeting.

General inflation slowed down in November with a rate of 7.8%; core inflation also registered a decrease and this was due to the offers and promotions of the Good End.

Of interest: More than 90 thousand m² of offices are leased in Mexico City during November

Banxico improved its inflation outlook for the fourth quarter of 2022 and the first quarter of 2023. The central bank estimates that in the fourth quarter of this year, inflation will be 8.1% from a previously estimated 8.3%, the data was benefited by the inflation registered in November.

For the first quarter of 2023, Banxico estimated that inflation will be 7.5%, a marginal decrease from a previously estimated 7.6%. For the following quarters, it is estimated that inflation will remain high and converge to the target until the fourth quarter of 2024.

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Original note