On 29 September, Mexico’s central bank raised its benchmark interest rate to a record 9.25 percent.

It was the third three-quarter-point bump in as many meetings of the bank’s rate-setting committee.

The move had been forecast unanimously by 25 economists Bloomberg had polled.

Mexico clocked its inflation rate at 8.8 percent in early September.

Prices will rise by 8.6 percent through this year, the bank predicted, and drop to 3.1 percent by the end of 2024.

Core inflation, ignoring food and fuel prices, will rise by 8.2 percent in this year’s final quarter and 4.1 percent at the end of 2023, according to the bank.

To ensure the peso’s strength, the central bank is expected to raise its rates in tandem with future increases by the U.S. Federal Reserve, The Wall Street Journal noted.

Bank officials “are finally starting to recognize the various inflation pressures that have accumulated,” Jessica Roldan, chief economist at Casa de Bolsa Finamex, told the WSJ. “Before, they were extremely optimistic.”

Mexico’s economy will grow by 2 percent this year and 1.2 percent next year, a Citi survey of economists predicted, compared to 4.8 percent growth in 2021.

Also last week on 30 September, India’s central bank added a half-point to its overnight lending rate, moving it from 5.4 percent to 5.9. 

India’s inflation rate was 7 percent in August.

It was the fourth increase since an unscheduled meeting in May, following rising interest rates elsewhere and cost pressures brought by Russia’s attack on Ukraine and resulting Western sanctions.

“There is nervousness in financial markets with potential consequences for the real economy and financial stability,” Shaktikanta Das, governor of the Royal Bank of India, said in a statement announcing the new rate.

“The global economy is in the eye of a new storm,” he added.

With inflation continuing at “alarmingly high levels” and a global recession looming, the world’s economic outlook is bleak, Das said.

TRENDPOST: The central banks in Mexico and India are examples of prudence. They have raised their key rates to levels that have a chance to make a difference to inflation.

In contrast, the U.S. and European central banks cut interest rates too much during the COVID War, then waited far too long to raise them after inflation began its march.

As a result, the U.S. Federal Reserve and European Central Bank’s rate increases are having only a slow effect on inflation, while rising prices continue to rob the population.