By Noe Torres
MEXICO CITY (Reuters) - The Bank of Mexico is expected to hike its benchmark interest rate to a record 10.75% on Thursday, amid a forecast increase in January inflation and following in the footsteps of the U.S. Federal Reserve, a Reuters poll showed on Tuesday.
Banxico, as the Mexican central bank is known, is expected to increase the key rate by 25 basis points from a current 10.50%, according to 24 of the 25 analysts and economists surveyed. One participant expects rates to be increased to 11.00%.
The expected move comes after the Fed scaled back to a quarter-percentage-point rate increase last week after a year of larger hikes and said it had turned a key corner in the fight against high inflation.
Banxico has raised its benchmark interest rate by 650 basis points during the current hiking cycle, which began in June 2021, as inflation surged past the bank's target rate of 3%, plus or minus one percentage point.
While inflation has been easing since hitting an over 20 year high of 8.70% in August and September last year, it still remains far above Banxico's target.
The median forecast of 20 analysts surveyed in the poll expects annual headline inflation at 7.89% for January, above the 7.82% reached in December.
The core index, which strips out volatile food and energy products, is forecast to have accelerated to 8.41% year-on-year.
In January alone, headline consumer price inflation is expected to have accelerated to 0.64% from a month earlier, while core inflation is expected at 0.69%.
Mexico's national statistics agency INEGI will publish January inflation data on Thursday morning and that afternoon Banxico will publish its monetary policy statement.