Mexico sets highest benchmark interest rate

Mexico's central bank raised the benchmark interest rate to 6.25 per cent, the highest since April 2009, to curb inflation, the media reported.

Inflation began to rise in October to close 2016 at 3.36 per cent, and rose to 4.72 per cent in January, Xinhua news agency reported.

The bank's governing board said the price of commodities in Mexico is being driven up by a recent increase in the gasoline price.

"We expect inflation this year to be temporarily affected...by the passing impact of the liberalisation of the fuel price," the bank said.

The bank forecasted annual inflation in 2017 would go over the target rate of 3 per cent by about one percentage point, then possibly dipped toward the year end to settle at close to 3 per cent by 2018.

The bank's benchmark interest rate has not exceeded 6 per cent since April 2009, when it reached 6.75 per cent.

It closed 2016 at 5.75 per cent.

--IANS

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