Bank of Mexico should discuss decoupling from US Fed, says Mejia By Reuters

© Reuters. FILE PHOTO: The logo of Mexico’s Central Bank (Banco de Mexico) is seen at its building in downtown Mexico City, Mexico August 9, 2022. REUTERS/Henry Romero

MEXICO CITY (Reuters) -Decoupling from the US Federal Reserve’s monetary policy should be one matter for discussion for the Bank of Mexico’s governing board at its upcoming monetary policy meeting, new Deputy Governor Omar Mejia said in a Bloomberg Linea story published on Wednesday.

“We’re going to be reviewing the data. We have the decision coming soon and these are elements we are going to have to incorporate,” Mejia said after a meeting with local bank association ABM.

Video accompanying the story quoted Mejia as saying the five-member governing board of Banxico, as the central bank is known, would discuss the issue at the meeting.

“It’s one of the elements, it is an important element, but it’s not the only element,” said Mejia.

Banxico did not immediately respond to a request for comment.

Banxico was already considering raising its key interest rate at its next monetary policy meeting, scheduled for Feb. 9, according to minutes from the December meeting, before inflation accelerated and exceeded expectations in early January, further bolstering those bets.

“The board considers that it will still be necessary to raise the reference rate in its next monetary policy meeting,” minutes from the December meeting said, adding it would then assess whether interest rates need to be adjusted further.

At its December meeting, Banxico rose its key rate by 50 basis points to a record 10.50%.

For its part, the Fed is also expected to raise its key lending rate at its meeting next week, on Jan. 31-Feb. 1, although at a slower pace than it has previously.

“The bank’s monetary posture has always been responsible with independence of the relative posture we have with the Fed,” said Mejia.

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