Banxico, the Central bank of Mexico, raised the reference interest rate to reach the highest of its levels in approximately 9 years and declared through an official notice that they will act in a timely and steady manner for the fortification of the anchorage of both mid- and long-term inflation expectations and will obtain the objective convergence of 3% of inflation.
The banking organization moved forward the indicator for about 0,25 points of the monetary policy until it reached 7.50%, which started at 7.25% in December. According to the same source, since Alejandro Dias de Leon is the head of the organization, it is the second time that the types raise.
In addition, the report presented by the Central Bank of Mexico commented on the presence of the different factors that could imply a risk of inflation and their expectations. If necessary, the monetary policy may act in a steady and timely manner so that we can strengthen the anchoring of mid- and long-term expectations in terms of inflation.
Between the main factors that Banxico takes into account to analyze the inflation, this one talked about a depreciation of the peso due to the unfavorable evolution of TLCAN, this is an adverse reaction of the markets to the monetary policy of the United States and to the volatileness that is associated with the programmed presidential elections for July.
According to Reuters, the inflation that is measured interannually reached, until January, the least level in 10 months, to register itself in 5,55%, but this still is very far from the range that had been put as maximum, a 3%.
The bank makes a projection that inflation will continue to fall, moving in 2018 towards the target range of 3%, also according to the analysis made in Reuters, it is believed that the monetary entity warned that given the high levels presented by the inflation it can be difficult to assimilate the external factors that have been increasing it.
In the report published by the board of government and the open market committee of the financial institution it is commented the importance of having a good monetary stance, so that it can avoid shocks in the process of the economy prices formation for the economy of the country, especially after the results of the TCLAN.
The cement company of Mexico, Cemex, which is one of the largest in the world and also has positioned itself as one of the market’s strongest companies, said that it doesn’t expect to detach from the assets to reduce the debt and that it will consider the approval of increasing capital, however, meanwhile it is taking into consideration the possibility of doing some investmenting.