All policymakers said they raised interest rates in a bid to protect the purchasing power of the peso, which had slumped more than 7 percent against the dollar in May, its worst monthly loss in four years.
Most of the board of Mexico’s central bank thought they needed to act to ensure the peso’s losses would not drive up inflation expectations and all members agreed they would act whenever necessary to ensure convergence toward their 3 percent inflation target.
Most central bankers also agreed there could be a prolonged period of greater uncertainty following the Brexit vote, which drove the peso to a record low.
Policymakers said that uncertainty could be accentuated by the U.S. presidential race, where candidate Donald Trump has threatened to disrupt trade ties with Mexico if he wins.
While the minutes did not mention Trump, some investment bank analysts have said strong polling gains by that candidate could hurt the peso.
The peso has gained more than 1 percent since the hike. Policymakers fear that peso losses could drive foreign holders of peso-denominated debt to dump bonds, sparking a mass exodus that would hammer the peso.
Most policymakers thought the balance of risks for both inflation and growth had deteriorated, even though they see annual inflation ending the year slightly above 3 percent.
more recommended stories
AMLO says he will not ‘confront’ Catholic church over sexual abuse claims
(Reuters) – Mexican President Andres Manuel.
Water treatment plant shut down in Cielo Alto, Southern Mérida
“After causing damage to the environment,.
“Villaventura” Parque Vivo: Interactive farm to bring children closer to nature
The importance of the direct contact.
Yucatan seeks to reduce the number of suicides with prevention program
Yucatan doubles the national rate of.
Maya train features mixed investment: 10% government and 90% private initiative
The Maya Train project will be.
Progreso Beach and the mafia behind the Palapas
In an extensive investigation conducted by.
Passenger stabbed to death inside a Merida public transport bus
What started as a fight ended.
The National Institute of Migration seeks to facilitate the integration of foreigners in Yucatan
MERIDA YUCATAN.- The National Institute of.
Yucatan´s new gastronomy
The president of the National Chamber.
Meet Merida’s new “Park Rangers”
MERIDA YUCATAN.- In order to maintain the.