Mexico’s central bank hikes its prime lending rate to 7.75%

MEXICO CITY (AP) — Stung by stubbornly high inflation, Mexico’s Central Bank has announced a three-quarter-point increase in its prime interest rate, to boost it to 7.75%. The Banco de Mexico said in the announcement Thursday that domestic inflation hit an annualized rate of 7.88% in the first half of June, and it doesn’t expect to achieve its 3% inflation rate target until the second half of 2024. The bank says global inflation continues to growma and the hike may not be the last increase. Moody’s Analytics Director Alfredo Coutiño says in a report that “Mexico’s policy rate will continue to tighten in an environment of increasing risk of expectations deterioration and persistent market volatility.”