The Bank of Mexico just hiked interest rates.
Banxico, as the bank is usually called, hiked by 50 basis points to 6.25% in its latest interest-rate decision, as most economists were expecting.
In the accompanying statement, the bank noted that emerging markets were facing greater uncertainty regarding fiscal, commercial, and migration policies under consideration by the new US administration.
The decision came amid a recent slight recovery in the peso. The beleaguered Mexican currency is up by about 7% since the day before US President Donald Trump’s inauguration.
Additionally, inflation has started to pick up recently. Mexico’s consumer price index increased by 4.72% year-over-year in January, marking the seventh consecutive month the rate has accelerated. This has been attributed primarily to rising energy costs following the government’s decision to raise gas prices by about 20% at the start of the year.
Thursday’s decision marks the third consecutive time in which Banxico has raised rates since Trump’s election in November. The bank hiked by 50 basis points at its November meeting, noting that the US election made the global economy “more complex.” And then it hiked again by another 50 basis points in December in a more aggressive move than most had expected.
Both decisions followed a tumultuous autumn for the peso, which ended up being one of the big market casualties of the 2016 election.
The Mexican peso was up by 0.6% at 20.3494 per dollar as of 2:02 p.m. ET on Thursday.
NOW WATCH: Mexican architects visualized Trump’s proposed $25 billion wall to show how unrealistic it would be
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.