Mexican CB Raises Rates by 50 BPS to 6.25%

Mexico is pulling out all the stops to shield itself from President Trump’s looming policies.
The country’s central bank raised interest rates Thursday for the third time since the U.S. election in an effort to save Mexico’s currency, the peso, which is near an all-time low. It raised rates by 0.5%.

Mexican leaders are very worried about all of Trump’s threats — a potential 20% tax on Mexican imports, a wall on the border, and renegotiating a trade deal.

In the big picture, Mexico’s leaders want — as best they can — to ease Trump’s impact on their economy and the peso’s diminishing value.

On Thursday, the peso did jump up a bit after the announcement. However, Trump has largely dictated its fate of late. The currency is down 10% since Trump’s election victory.
“The peso movement has mostly been a reaction to Trump” says Rodrigo Aguilera, an economist at the Economist Intelligence Unit. “Mexico hasn’t really had a huge influence in how the peso has behaved.”

via CNN

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