LONDON (Reuters) - The Mexican peso
Mexico's central bank raised rates to 5.25 percent on Thursday, the highest level since May 2009, but the market had been looking for a hike of at least 75 basis points.
The peso has been in the firing line over worries that U.S. president-elect Donald Trump will carry out his campaign threats to impose trade tariffs and block remittances.
The peso is still flat against the dollar this week but shed almost 9 percent last week after tumbling to a record low in the wake of Trump's win, posting its biggest two-day loss since a 1995 devaluation.
It currently stands some 3 percent off record lows.
"The market is saying that given the fall in the currency you will have a significant inflationary impact," said Jakob Christensen, head of emerging markets research at Deutsche Bank (DE:DBKGn).
"Inflation is on the rise and so by just raising 0.5 percent you might not stem the pass through from the depreciation of the peso."
