MEXICO CITY (AP) -- Stung by stubbornly high inflation, Mexico's Central Bank announced Thursday that it made a thre-quarter-point increase in its prime interest rate, to boost it to 7.75%.
The Banco de Mexico said in the announcement that domestic inflation hit an annualized rate of 7.88% in the first half of June, and it doesn't expect to achieve its 3% inflation rate target until the second half of 2024.
The bank said global inflation continues to grow and the rate hike may not be the last increase.
Moody's Analytics Director Alfredo Coutiño said in a report that "Mexico's policy rate will continue to tighten in an environment of increasing risk of expectations deterioration and persistent market volatility."
Mexico's economy grew 1% in the first three months of the year, accelerating somewhat after registering meager 0.2% growth in the previous quarter.