Mexican central bank slows pace of key interest rate hikes

Mexico City, March 31 Mexico's central bank, Banxico raised its key interest rate again but reduced the pace of increases given the downward trajectory of inflation.

The Board of Governors unanimously decided to raise the benchmark interest rate by 25 basis points to 11.25 percent effective Friday, Xinhua news agency reported citing an official statement as saying.

Since December 2021, Banxico has opted for key interest rate increases of 75 and 50 basis points, given the acceleration of inflation.

The central bank highlighted that inflation has slowed down more than expected, estimating it will close the year at 4.8 per cent.

President Andres Manuel Lopez Obrador said earlier this week that the country's economy maintains a growth trajectory and will not fall into a crisis due to recent external turbulence in the banking sector.

Lopez Obrador added that Mexico is resisting external factors such as inflation and the bankruptcies of some foreign banks.

According to the President, Mexico is one of the most attractive countries for investment due partly to the US-Mexico-Canada Agreement on free trade.