Mexico central bank raises key interest rate to 7.75 per cent

MEXICO CITY – Mexico’s central bank has decided to raise its key interbank interest rate to 7.75 per cent from 7.5 per cent.

The bank cited uncertainty around negotiations on the North American Free Trade Agreement and Mexico’s upcoming July 1 elections.

The peso closed slightly stronger Thursday before the announcement, at 20.25 to $1. However, the peso has lost about 9 per cent in value against the dollar over the last two months.

The Bank of Mexico said inflation decreased slightly in May to an annual rate of 4.51 per cent. It was 4.55 per cent in April.