(Adds comments from Banxico board member, economist)
MEXICO CITY, May 13 (Reuters) - Mexico’s central bank on Thursday kept its key interest rate steady in a unanimous decision by its five-member board that reflected growing concerns about the path of inflation and triggered speculation the next move would be a hike.
For the second meeting in a row, the Bank of Mexico, known locally as Banxico, kept the rate unchanged at 4.0%, after cutting it by 25 basis points in February.
Banxico said that inflation expectations for 2021 had risen since its last monetary policy meeting and that the balance of risks for prices had an upward bias.
By Reuters Staff
(Adds comments from central bank board member, background)
MEXICO CITY, May 14 (Reuters) - Mexico’s inflation likely peaked this year when it breached the 6.0% level in April and should decline to below 5.0% by the end of this year, central bank board member Jonathan Heath wrote in an article published on Friday.
Mexico recorded faster-than-expected annual inflation of 6.08% last month, the highest level since December 2017, moving well above the Bank of Mexico’s target level of 3%, with a 1-percentage-point tolerance range above and below that.
“It’s very likely inflation will begin a slow downward trajectory during the remainder of the year and as the effects of the pandemic dissipate we should see a return to a certain normality next year,” Heath wrote in Forbes Mexico.
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Mexico's central bank on Thursday kept its key interest rate steady, as expected, in a unanimous decision by its five-member board that reflected growing concerns about the path of inflation and expectations the next move would likely be a hike.
Mexico's central bank on Thursday kept its key interest rate steady at 4.0%, as expected, in a unanimous decision by its five-member board, saying that a highly uncertain environment poses major challenges for monetary policy. (Reporting by Frank Jack Daniel and Anthony.