Hike rates to 6.5% from 6.25%

  • Growth outlook improved at margin since last meeting
  • core CPI rising due to accumulating MXN pass-through
  • Surveys continue showing expectations for CPI to slow
  • downside CPI risk is energy prices falling with international price
  • long-term inflation expectations remain near 3.5%
  • CPI to be affected this year by peso depreciation
  • CPI to be affected this year by fuel price liberalization
  • CPI forecast above 4% for most of year
  • CPI to slow to near 3% by end of 2018
  • doesn't see CPI pressures from aggregate demand