(Bloomberg) — The Bank of Mexico’s decision to raise the interest rate by half a point at its meeting this week was specifically aimed at anchoring inflation expectations, which have been hit harder than expected by problems in the supply chain, Governor Victoria Rodríguez Ceja said Friday.
The decision was the Board’s first unanimous vote since the central bank began its current tightening cycle in June. By voting together, the five members sought to send a message that they were moving fast to control expectations, Rodriguez said in a magazine with El Financiero Bloomberg TV.
Inflation expectations are a factor “that we are very interested in taking care of, anchoring,” he said on the sidelines of the annual Mexico Banking Convention held in Acapulco. Therefore, “the five members of the Board made the decision, or we made the decision, unanimous to increase the rate by 50 basis points.”
Rodríguez, who took office in January, said he saw inflation begin to slow in the second quarter of this year.
He indicated that the bank’s autonomy was guaranteed, and the day after President Andrés Manuel López Obrador dropped a bomb by announcing the hike before the bank itself published the decision. Later on Thursday, the president apologized to Rodríguez and the Board, saying that he thought the decision was already public.
López Obrador brought Rodríguez Ceja, then Undersecretary of Expenditures, out of obscurity in November and made her the most powerful woman in Latin American finance.
Since taking office, Rodríguez has voted with the board for two half-point rate increases, raising the rate to 6.5%. The raises, along with periodic assertions of the bank’s independence, have helped calm market nervousness over its lack of experience and speculation that the chairman might want to influence his decisions.
Banxico focused on anchoring price expectations, says governor
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