Mexico Raises Rate as Peso Weakness Spurs Inflation Concerns
- Peso plunged most after South African rand since mid-April
- After two hikes, Fed may have two more left in store for 2018
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Mexico increased borrowing costs for the second time this year as higher U.S. interest rates, global trade tensions and the July 1 presidential election have battered the country’s peso, posing a risk to inflation. The currency strengthened on the decision.
Policy makers, led by bank Governor Alejandro Diaz de Leon raised the key interest rate a quarter-point to 7.75 percent, matching the forecast of 18 of 25 economists surveyed by Bloomberg. Six analysts expected no change in policy while one saw a half-point hike.