The Central Bank of Mexico kept its benchmark interest rate at a 10-year high of 8.25 percent on February 7th 2019, as widely expected. The decision was unanimous, after the peso strengthened and inflation slowed. The annual inflation rate decreased further to an over 2-year low of 4.37 percent in January 2019 from 4.83 percent in December while markets had expected it at 4.49 percent. However,policymakers noted that inflation expectations had increased in a context of great uncertainty; for the medium and long term, they remain above the target of 3%, in levels of 3.5%. The bank also warned that growth could continue decelerating at the beginning of 2019 amid recent disruptions in distribution of gasoline and blockages of transport routes. Finally, it was stressed the importance of meeting the fiscal targets of the Economic Package 2019 to reduce potential risks. Interest Rate in Mexico averaged 5.60 percent from 2005 until 2019, reaching an all time high of 9.25 percent in October of 2005 and a record low of 3 percent in June of 2014.
Interest Rate in Mexico is expected to be 8.25 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Mexico to stand at 8.50 in 12 months time. In the long-term, the Mexico Interest Rate is projected to trend around 8.50 percent in 2020, according to our econometric models.