The Central Bank of Mexico raised its benchmark interest rate by 25 bps to a 10-year high of 8.25 percent at its December 2018 meeting, as widely expected. The decision was unanimous and comes a day after the Fed raised the benchmark rate by 25 bps. Policymakers said that action was needed to restore investor confidence, as financial volatility prevails abroad and domestic policy uncertainty has not yet diminished. Also, inflation expectations had increased. The annual inflation rate decreased to 4.72 percent in November 2018 from 4.90 percent in the previous month but remains above target range. Interest Rate in Mexico averaged 5.57 percent from 2005 until 2018, 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 8.25 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.