Mexico May Raise Interest Rate

Mexico’s central bank is likely to raise its key interest rate by at least 75 basis points Wednesday if US Republican candidate Donald Trump wins the US election to become the country’s next president, three economists said, VoAnews reported. Trump has threatened to rip up the North American Free Trade Agreement and build a wall between Mexico and the US border. Trump’s lead pushed the peso to a record low, falling around 13 percent and breaking the 20 pesos-per-dollar barrier in its biggest fall since the 1994 Tequila Crisis. Three economists told Reuters they expected the Banco de Mexico to raise its benchmark interest rate by between 75 and 150 basis points in an extraordinary meeting Wednesday. Mexico’s peso had been one of the worst performing major currencies this year, and the central bank has hiked interest rates three times this year in a bid to support the currency and keep its weakness from driving up inflation.