Bank of Mexico Deputy Governor Jonathan Heath stated on Friday that the central bank is expected to hike its benchmark interest rate by 75 basis points at its next meeting on June 23.
Jonathan Heath said that inflation would likely be even higher if not for a government anti-inflation plan, especially subsidies for domestic gasoline and diesel.
Inflation rose 7.65% in the 12 months through May, according to data published by the national statistics agency.
Bank of Mexico said it is willing to act more forcefully on monetary policy if needed to bring inflation back down.
The central bank has an inflation target of 3% plus or minus one percentage point.
It has increased its benchmark interest rate by 300 basis points since mid-2021 to its current level of 7%.
The Bank of Mexico has hiked the key interest rate at seven monetary policy meetings in a row to try to rein in inflation.
The central bank’s target is 3% inflation with a 1-percentage-point tolerance range above and below that. Mexico’s government is one of the few that has the luxury of additional oil income to help finance those subsidies.
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