Peso depreciation casts shadow over Mexico rate decision
Central bank adamant it is not in a hiking cycle after 50bp rise
The Bank of Mexico decided to hike its policy rate by 50 basis points on February 17, despite a deteriorating global economic backdrop.
Led by governor Agustín Carstens, the central bank’s monetary policy committee unanimously decided to increase interest rates to 3.75%, on the basis that continued depreciation of the peso would increase the probability inflation would not meet the 3% target set by the central bank.
“The reason behind the hike was that recent peso depreciation could harm
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