Reuters Despite rate hikes, analysts expect Mexico’s inflation to reach twice the cenbank’s objective in 2021. Despite the Bank of Mexico raising its benchmark interest rate last month to combat rising inflation, analysts now expect Mexican inflation to reach around 6% by the end of the year, more than double the central bank’s target. At its monetary policy meeting on June 24, Banxico, as the central bank is known, unexpectedly hiked the benchmark interest rate by 25 basis points to 4.25 percent, citing the need to avoid unfavorable effects on inflation expectations and mentioning price formation in the United States. Annual consumer price inflation in June was 5.88 percent, significantly over Banxico’s target rate of 3 percent plus or minus one percentage point, as Latin America’s second largest economy recovers from the effects of the coronavirus pandemic./n
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