Bank of Mexico Holds Rates, Betting Inflation Will Soon Peak

By Juan Montes Features Dow Jones Newswires

The Bank of Mexico stood pat on interest rates Thursday, as widely expected, betting that a recent surge in consumer prices is close to a peak.

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Mexico's central bank left its overnight interest-rate target unchanged at 7% after seven consecutive rate increases that put borrowing costs at their highest level since early 2009. The decision was unanimous among voting members.

Inflation hit a more than eight-year high in July at 6.44%, well above the central bank's 3% target, as a result of a big increase in gasoline prices earlier this year and a recent pickup in agricultural prices.

But in its policy statement, the central bank said inflation "seems to be nearing to a peak." The bank expects inflation to start slowing down late this year and approach the target by the end of 2018.

Write to Juan Montes at juan.montes@wsj.com

(END) Dow Jones Newswires

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August 10, 2017 14:46 ET (18:46 GMT)