The Bank of Mexico just hiked rates by more than expected

The Bank of Mexico just hiked rates by more than expected.

Banxico, as the bank is usually called, hiked rates by 50 basis points to 5.75%, up from the prior rate of 5.25%.

Economists had forecast that the bank would hike rates by 25 basis points, according to the Bloomberg consensus.

“The decision by Mexico’s central bank to raise interest rates […] underlines the point that, while the peso has stabilised in recent weeks, policy makers will remain focused on containing the inflationary pass-through from a weaker currency,” wrote Capita Economics’ Neil Shearing in a note.

Previously, in its first meeting after Donald Trump’s election, Banxico hiked rates by 50 basis points to 5.25% — its highest rate since 2009 — up from 4.75%.

The Mexican peso is up by 0.2% at 20.4172 per dollar as of 2:04 p.m. ET. Ahead of the rate decision, the peso was down by about 0.4% against the dollar.

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