23.06.201700:26:00UTC+00Mexico Signals End of Rate Hike Cycle

Mexico's central bank hiked interest rates for the seventh consecutive time and signaled the end of its cycle of lifting borrowing rates as it perceives the new interest rate level to be consistent with “efficient convergence” of inflation toward its target.

Banco de Mexico hiked its benchmark interest rate by 25 bps to 7 percent, meeting estimates of majority of economists. One of the policymakers voted against the decision and called for the central bank to stand pat on rates, the statement of the accompanying ruling showed.

The central bank continued its hiking cycle amid a steep fluctuation in prices after the U.S. Federal Reserve hiked its own interest rates. Governor Agustin Carstens has previously stated that inflation will decline significantly in the latter half of 2017 and the peso's appreciation will help it hit the target in 2018. The central bank's statements along with Carstens comments are leading economists to believe that Mexico's hawkish streak has ended.