Yet another interest rate hike by Mexico’s Central Bank may be a short-term boost for savers, but for borrowers and those who like to live on credit, it’s hardly the greatest of news.
The half point increase to 4.75 percent late last week – the third increase this year – takes the base interest rate to its highest level since 2009.
The move was prompted by the increased depreciation of the peso, which has continued to tumble in recent as the U.S. general election nears.
Banco de Mexico Governor Agustin Carstens and his board released a statement saying action was needed to reduce inflationary pressure and the potential for financial volatility.
Also this week, the International Monetary Fund trimmed its forecast for growth in Mexico in 2016 by 0.4 percent to 2.1 percent.