The Central Bank of Mexico raised its benchmark interest rate by 25 bps to a nearly 10-year high of 8.0% at its November 2018 meeting, as widely expected. Policymakers underscored that inflation risks intensified since the last meeting, as a sharp depreciation in the peso was observed as a result of both external and domestic factors, with the latter mainly explained by a high degree of uncertainty regarding the next federal administration’s policies. One member of the board voted in favor of a 50-bps hike. The annual inflation rate in Mexico eased to 4.9 percent in October 2018 from 5.02 percent in September. Interest Rate in Mexico averaged 5.57 percent from 2005 until 2018, reaching an all time high of 9.25 percent in October of 2005 and a record low of 3 percent in June of 2014.
Interest Rate in Mexico is expected to be 8.00 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Mexico to stand at 8.00 in 12 months time. In the long-term, the Mexico Interest Rate is projected to trend around 8.25 percent in 2020, according to our econometric models.